Nigeria’s independent oil traders expect the Dangote Oil Refinery to sell petrol for 600 or 650 naira per litre when it finally hits the market. Dealers under the Independent Petroleum Marketers Association of Nigeria said they are confident that the construction of the Dangote refinery will also see petrol prices crash as much as diesel prices.
IPMAN national vice-president Hameed Fashola, in an interview with reporters on Monday, said the $20 billion refinery would reduce fuel costs if given the necessary support, especially in terms of crude oil supplies.
He said the Nigerian National Petroleum Company, the sole importer of PMS, was selling it to traders for 570 naira per litre, but most IPMAN members buy it from private warehouse owners for more than 700 naira.
“We are marketers, we go for the best. We have been buying from the NNPC, but if the opportunity of Dangote comes and the price is favourable, we will grab it. It depends on the price.
“The official price from the NNPC is around N570/litre, but the third parties, the private depots sell PMS to most of our members at N700 and above.
“Plus or minus, we hope Dangote can sell between N600 and N650/litre. N600 is still okay. However, it depends on the cost of the production from Dangote’s end. We have to be factual and sincere to ourselves. The NNPC we are talking about has an element of subsidy or what they now call under-recovery. I think something is hidden there,” Fashola explained.
On the price of diesel, Fashola said, “I am aware that Dangote refineries are driving down the price of diesel.” When the refinery started production, the price of diesel was about 1,600 naira, but it has since dropped to 1,000 naira.
“Now you can buy diesel at N1,150 or N1,200/litre. We expect the same with PMS, but this crude crisis is a major challenge. Even if Dangote is buying crude in naira, if it is at the international market price, it will make no difference. We have to be realistic.”
IPMAN chairman said the association has held business talks with several refinery representatives for possible collaboration, and market players are waiting for Dangote. “The discussion continues. We are on course. I think very soon we will conclude the discussion. We are waiting,” he explained.
Journalists recalled that last month, the President of the Dangote Group, Alhaji Aliko Dangote, predicted that the refinery would begin producing gasoline between August 10 and 12, 2024. But for various reasons, the 650,000 barrel-per-day refinery was unable to pump gasoline on Monday.
The results showed that the ongoing crude supply crisis could be a setback for refineries.
