The Dangote oil refinery is set to put an end to the monthly importation of an average of 1 billion litres of premium motor spirit (PMS) in Nigeria.
This was as the Chairman of the Dangote Group, Aliko Dangote, revealed that Nigeria would end petrol imports the moment the refinery started selling the product in June.
It was earlier reported that the country’s monthly petrol import was reduced by about 1 billion litres after President Bola Tinubu removed fuel subsidies in June, according to a report by the National Bureau of Statistics (NBS)
The NBS report indicated that the country received fuel importation of 2.09 litres in January 2023, while 1.99 billion litres was imported in February of the same year. It was 2.29 billion litres in March; 1.91 billion litres in April and 2.01 billion litres in May last year.
According to The PUNCH, the quantity of PMS imported in June, the first post-subsidy month, dropped to 1.64 billion litres.
The downward slope got deeper in July when the import was reduced to 1.45 billion litres.
Speaking at the Africa CEO Forum Annual Summit in Kigali, Rwanda on Friday, Dangote expressed optimism about transforming Africa’s energy landscape.
According to him, following the laid-down plans of the Dangote refinery, Nigeria will no longer need to import petrol starting next month.
Dangote also stated that his refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.
He said, “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre”, he declared.
He added, “We have enough gasoline to give to at least the entire West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.
“We have started producing jet fuel, we are producing diesel, and by next month, we’ll be producing gasoline. What that will do, it will be able to take most African crudes”, Dangote told the panel.
The Dangote refinery also struck a crude oil supply deal with TotalEnergies
Dangote’s 650,000 barrels per day refinery has been trying to secure crude supplies from the United States following the inability of Nigeria to ramp up production.
The refinery, which is the largest in Africa and Europe when it reaches full capacity, has since commenced the sale of diesel and aviation, but its petrol is yet to hit the market.
A few days ago, the company had put out a tender for two million barrels of West Texas Intermediate Midland crude every month for a year starting in July.
In April, Dangote crashed the price of diesel from around N1,500 to N1,000 per litre.
Nigerians were eagerly waiting for petrol, which is the major fuel used for transportation and alternative power generators.
The words of Dangote appeared to have come as a soothing balm to marketers and Nigerians, who are yet to fully recover from the recent fuel scarcity that almost grounded the economy.
In an interview with The PUNCH, the National Vice President of the IPMAN, Hammed Fashola said that the Dangote refinery can supply fuel to Nigeria and West Africa.
“We are happy about it and I believe it is possible when you consider the capacity of the refinery. Due to the capacity, I think the Dangote refinery can satisfy our needs as far as petroleum products are concerned, especially petrol. He can even satisfy other West African countries. It is good news”, Fashola stated.
The IPMAN leader expressed the eagerness of marketers to start lifting fuel from the refinery, saying, “We are all waiting, we are eager for the commencement of the lifting on petroleum products from Dangote refinery, especially petrol”.
Asked if the marketers were expecting a price cut like it happened when the refinery started selling diesel, Fashola retorted that the price may not go back to the N200 per litre that it was before the removal of fuel subsidies, but there would be a marginal reduction.
“On price, I don’t want to predict, but when you look at it from the angle of common sense, the price cannot come back to our old price, but I believe there should be some changes in terms of price because when you look at other factors associated with imported petroleum products, there are some costs that will be cut off, not the major ones; but I believe there will be a little price difference”, he maintained.
The marketer stressed that the private refinery would put an end to fuel scarcity in Nigeria as the product would no longer be imported.
Meanwhile, Fashola explained that IPMAN as a body is yet to have an agreement with the Dangote refinery on the supply of premium motor spirit, calling on the company to consider working directly with the association instead of individuals.
He noted that IPMAN should be a beautiful bride before Dangote for being in control of over 80 per cent of the filling stations in Nigeria.
In a recent interview with PUNCH, the Executive Secretary of the Major Energies Marketers Association of Nigeria (MEMAN), Clement Isong, disclosed that MEMAN members have registered with the Dangote refinery.
“We have all registered with Dangote so that we call buy and sell. All my members are registered with Dangote. Whenever the product is ready and starts coming out, you will see it in our filling stations.
“I confirm that my members have registered with them. We were waiting for the production to start and now it has started and they will start discussing the commercial terms.
“So now the commercial terms will be agreed with each marketer and then they will buy from them. There are several ways you can buy from them. They have loading ranks, over 90, so you can take your truck to go and pick. You can also use vessels to pick. Those are the two ways you pick products”, Isong said.
On pricing, Isong noted, “The price should be the market price because you need to recover your cost and capital, then repay your loans. I don’t know what the market price will be, but I know that with my international experience in the economics of petroleum, nobody does this business to make a loss”.
In January, the Dangote Group confirmed the registration of oil marketers as its distributors, stating, “Three prominent associations, that constitute 75 per cent of the total market in Nigeria have been registered. The Depot and Petroleum Products Marketers Association of Nigeria, the Independent Petroleum Marketers Association of Nigeria, and the Major Energies Marketers Association of Nigeria”.
The Nigerian National Petroleum Company Limited has been the only company importing PMS in Nigeria, capping the price of the product below the cost.
During an energy conference in Abuja recently, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, opined that Nigeria does not need to import fuel, expressing concerns that the bulk of the country’s foreign exchange goes into fuel importation.
“We must find a solution to our forex problem. Nigeria does not need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products”, Lokpbiri stated, expressing optimism that home-based refineries would put an end to fuel importation.
Meanwhile, Nigerians are expressing mixed reactions about the refinery; while some are glad, others said they are tired of waiting.
