The Dangote refinery may resort to exporting its Premium Motor Spirit (petrol) following the refusal of the NNPC Limited (NNPCL) to be the sole buyer of its product.
In a statement on Saturday by its spokesman, Mr. Olufemi Soneye, NNPC said that it would not buy Dangote fuel unless it was cheaper than that of the international market.
This is contrary to claims by the President of the Dangote Group, Alhaji Aliko Dangote, that the refinery was waiting for the NNPCL to roll out its product.
On Saturday, the NNPCL stated that it would only fully offtake petrol from the refinery if the market prices of PMS were higher than the pump prices in Nigeria.
The NNPCL also declared that Dangote and other domestic refineries were free to sell directly to any marketer on a willing buyer, willing seller basis, adding that it had no desire or intention to become the distributor for any entity in a free market environment.
The company was reacting to a press release by the Muslim Rights Concern (MURIC), which claimed that the Dangote refinery was being undermined by the NNPCL.
MURIC stated that recent changes to the pump price of petrol by the NNPCL would prevent the refinery from offering lower prices, and that the corporation had become the sole offtaker of all products from the refinery.
Responding, the NNPCL said, “The pricing of petroleum products from any refinery, including Dangote Refinery Limited, is determined by global market forces.
“The recent changes in PMS prices have no impact on DRL or any other domestic refinery’s access to the Nigerian market. In fact, if current prices are perceived as high, it presents an ideal opportunity for the refinery to sell its products at lower prices in the Nigerian market.
“Furthermore, we emphasise that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL. The NNPC Ltd will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria. The DRL and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products. NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole off-taker does not arise”.
Soneye added that the NNPCL could not undermine a business in which it held a billion-dollar investment.
While unveiling the 650,000-capacity refinery on Tuesday, Dangote had stated that the facility would roll out petrol whenever the NNPCL was ready.
Dangote disclosed that petrol would get to the filling stations in the next 48 hours (from Tuesday) after all arrangements with the NNPCL were concluded, adding that the queues would soon be over.
“Our PMS can be in filling stations within the next 48 hours, depending on NNPCL”, he said.
He spoke further, “We are ready. I pray that within the next few days, you won’t see any petroleum queues as soon as we finalise with NNPCL. We are ready, we are waiting for them (NNPCL) and I hope they will be ready like yesterday.”
Dangote told newsmen that he could not disclose the price of the petrol because the NNPCL was in a position to control it.
“On the pricing, I can’t say anything because we don’t control the pricing. At the moment, it is controlled by NNPCL, not Dangote. We will wait for them. But, our own for now is to make sure that the product is available and round-tripping is stopped”, he noted.
The businessman emphasised that the NNPCL was the company that would sell and distribute the product under the current naira crude sale arrangement.
“Once the NNPCL is ready, we roll. We are even ready to load a ship this week,” he added.
But it seems the talk between the two companies have collapsed, which may result in the company selling its petrol abroad.
The NNPCL has issued several statements denying that it will fix the price for Dangote or be its sole off-taker, even as the refinery has yet to roll out its product.
Nigerians have wondered why the NNPCL decided to hike the pump price of petrol the same day Dangote refinery unveiled its petrol, after several months of implicit subsidy payment.
The masses, who were hopeful that the Dangote fuel would crash the price of petrol, may be losing hope.
Speaking on the Brekete Family live show on Monday, the Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, said Dangote petrol would be exported if the NNPCL and other petroleum dealers in the country refused to patronise it.
Asked if the petrol would be sold locally, Edwin replied, “There has been a kind of a blockade from lifting our products within the country. The traders have been trying to blockade, and so now, we have been exporting our petroleum products. We are ready to pump in PMS as much as possible to the country.
“But if the traders or NNPCL are not buying the product, obviously we will end up exporting the PMS as we are doing with the aviation jet and diesel”, he declared.
Edwin expressed surprise that the company started facing challenges it never expected when the refinery was set to commence operations.
He recalled that the philosophy initially was to add value to the raw materials available in the country, regretting that Nigeria was still exporting crude and importing refined petroleum products after over three decades.
Despite having a gantry that can load 2,900 tankers per day, Edwin disclosed that the refinery had not loaded up to five per cent of the gantry’s capacity owing to low local patronage.
In an interview with PUNCH, a professor of Economics at the University of Ibadan and President of the Nigerian Economics Society, Adeola Adenikinju, advised that the government and the NNPCL should buy PMS from the Dangote refinery instead of importing from another country.
“Dangote refinery is a private business; he will export to where he can make money. He cannot be subsidising our economy. It is still going to be cheaper for the NNPCL to buy from Dangote than to import from Europe. Dangote has to run the business and pay his debts, he can’t subsidise us”, Adenikinju noted.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) on Saturday said it would buy PMS from Dangote at any price, even if the NNPCL refused to buy.
Petrol price hike will worsen inflation
The National President of the association, Abubakar Maigandi, told PUNCH that the independent marketers were ready to patronise Dangote.
“Whatever the case, if Dangote starts selling his product, we are going to patronise him; if at all he wants to do business with us.
“We are ready to buy at any price because the NNPCL is saying that they don’t want to involve themselves in fixing prices. So, at any price that he wants to sell, we are ready to buy and discharge and sell at a good price”, Maigandi stated.
Members of IPMAN own about 80 per cent of the filling stations in Nigeria, especially in rural communities.
On Thursday, the NNPCL also said it was waiting for a 15 September timeline given to it by the refinery.
The latest comments from the NNPCL indicate all is not well with the negotiations between the two companies.
The spokesman for the Dangote Group, Anthony Chiejina, did not answer calls or reply messages sent to him newsmen on Saturday.
Black marketers sell fuel N1,400 in Benue Meanwhile, black marketers are making brisk business as most filling stations in Makurdi, the Benue State capital, closed for business.
Since the hike in the price of the petroleum product, many filling stations have been shut down while the black market has resurfaced.
PUNCH observed that in Makurdi on Saturday, several filling stations were not operating while black marketers were using their frontage to sell the product to motorists.
The product was sold between N1,300 and N1,400 per litre.
This development resulted in few vehicles plying the roads, while transport fares skyrocketed and people resorted to trekking.
Despite the promise made by the Minister of State for Petroleum Resources, Heineken Lokpobiri, that fuel would be available in filling stations by the weekend, the situation in Ondo State has not improved.
A visit to some filling stations in Akure, the state capital, showed that many petrol stations were still under lock and key following unavailability of the product, while NNPCL stations with the product had long queues.
Also, some stations of the independent marketers were selling for between N950 and N1,100 per litre.
In Ekiti State, many petrol stations dispensed petrol to customers, while a few did not have the product.
The price was between N950 and N1,200 per litre at the stations dispensing petrol.
Long queues of vehicles were at the few stations selling the product at between N950 and N960 per litre.
A self-employed man, Mr Abel Olode, who said he bought some litres of petrol for N960 per litre on Friday, said, “I parked the car at home and boarded a motorcycle to my place of work today. Using it daily will drain my finances”.
Filling stations belonging to major marketers in Ogun State sold fuel for between N868 and N890 per litre, while independent marketers sold for between N950 and N1,200 per litre.
The NNPCL outlets, however, sold at N865 per litres.
A motorist, Adeolu Bashir, said, “Nothing has changed with the fuel situation. The independent marketers are selling the fuel for N1,200; meanwhile, not many of the filling stations are selling the product”.
As of 7 September 2024, independent marketers in Ibadan, the Oyo State capital, were dispensing fuel at N1,100 and N1,200 per litre. There were no long queues in most of the filling stations in the city
Long queues still persisted in most of the filling stations in Zamfara State, despite the hike in fuel price.
Most of the filling stations, controlled by IPMAN in Gusau town and other parts of the state, were selling a litre of fuel between N1,100 and N1,150.
There was no fuel in all the mega stations visited by Sunday PUNCH as of the time of filing this report.
Despite the scarcity of PMS in some states, the product seemed to be available in most filling stations across the 13 LGAs of Nasarawa State.
Some of the stations in Lafia, the state capital, on Saturday, it was observed that there were no queues.
The prices of PMS in Obi, Awe, Keana, Doma, Toto and Nassarawa Eggon LGAs had skyrocketed to N1,100 per litre.
Filling stations such as Sandaji, Hayattu, Alh Dauda Muhammadu, Nagoda, Rainoil among others, all sold at N990 per litre.
Meanwhile, the product is currently being sold between N1,200 and 1,400 by the black market dealers in several locations across the state.
In an interview with PUNCH, one of the black marketers, Musa Inusa, said getting the product had become “extremely difficult” for him because of the strict restrictions and increase in price.
