The pump price of petrol, ought to drop to around N300/litre upon the commencement of enormous production by the Dangote Petroleum Refinery and other indigenous producers, operators of modular refineries expressed on Sunday.
In any case, they pointed out that this would be accomplished when the government guarantees the arrangement of satisfactory unrefined oil to local refiners, focusing that refineries abroad were ripping off Nigeria.
Speaking under the aegis of the Crude Oil Refinery Owners Association of Nigeria, they clarified that what happened to the cost of diesel after Dangote started producing it, would happen to petrol cost once it is being delivered massively in Nigeria.
CORAN is an enrolled association of modular and conventional refinery companies in Nigeria.
“A lot of companies today benefit from the importation of petroleum products at the expense of Nigerians,” the Publicity Secretary, CORAN, Eche Idoko, stated.
He told journalists that “if we begin to produce PMS today in large volumes, provided there is adequate crude oil supply, I can assure that we should be able to buy PMS at N300/liter as the pump price.”
“Why make Nigerians buy it at almost N700/litre when you know that if you allow refineries to work the price will come down? Is it because you want to satisfy the global refiners abroad that are making so much from us?”
When told that there are contentions that it isn’t possible to have such a drop in cost since crude oil, the crude material for PMS, is priced in dollars, the CORAN official demanded that petrol cost would crash once it is being delivered massively by indigenous refiners.
He said, “We were selling diesel for N1,700 to N1,800/litre, but as soon as Dangote refinery started production he brought down the price to N1,200/litre. What other proofs do you need?
As I speak to you presently there is every propensity that before December diesel costs will drop. The only reason why diesel isn’t doing below N1,000/litre is because of our exchange rate.
“If the exchange rate drops, diesel will drop below the N1,000/litre price. Now the exchange rate concern is because Dangote imports crude. If he is not importing, the exchange rate may not have so much effect, though he is still buying crude in dollars (in Nigeria) anyway.”
On May 18, 2024, it was detailed that Africa’s wealthiest man, Aliko Dangote, expressed that taking after the laid-down plans of the Dangote refinery, Nigeria would not need to import petrol starting June this year.
Dangote had moreover expressed that his refinery seems to meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel request. He spoke at the Africa CEO Forum Annual Summit in Kigali, expressing optimism about transforming Africa’s energy landscape.
“Right now, Nigeria has no cause to import anything apart from gasoline (petrol) 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,” the billionaire had declared.
Moreover, Dangote had earlier in the year slammed the pump cost of diesel to N1,200/litre when the product was selling at between N1,700 and N1,800/litre at the time.
He dropped the cost to below N1,000/litre, but might not support this price due to the rise in trade rate. The refinery in the long run returned the cost to the initial rate of N1,200/litre.
Speaking on Sunday, the CORAN spokesperson expressed that this was why the modular refiners had been calling for the deal of crude oil at the naira equivalent of the dollar rate.
“We have told them (government) that even the dollars that you are asking us to use and buy this product, it is detrimental to the country. Strengthen the naira. We will buy at the international market rate but at a naira equivalent.
“These are the issues and they know these things but we can’t explain why they really can’t take decisions to change these concerns.
“Get crude to local refineries, allow crude purchase in naira equivalent, make the environment business-friendly, and watch locally produced petroleum product prices crash,” Idoko stated.
Nigeria currently has 25 authorized modular refineries. Five of them are working and producing diesel, kerosene, black oil, and naphtha. About 10 are under different stages of completion, whereas the others have received licenses to set up.
Operators of modular refineries previously expressed that aside from the five that are in operation as of now, the remaining plants are troubled due to the major challenge of rough oil unavailability, a development that has stalled funding from financiers.
“Only about five of our members have completed their refineries. The others are having a major challenge.
“This challenge is that the people who are supposed to finance them have not disbursed financing for construction because they want some level of guarantee.
“A guarantee that if they finish the refinery, they are going to get feedstock, which, of course, is crude oil,” Idoko had explained.
Oil marketers moreover believe that the cost of petrol should be lower than its current cost once its production starts in Nigeria.
They welcomed the comment of Dangote that his refinery should begin pumping out petrol this month and expressed trust that the cost would be less than the price that the Nigerian National Petroleum Company Limited currently offers.
“We expect a reduced price for locally produced PMS, as I’ve earlier told you,” the National President of, the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, stated.
Maigandi, while speaking from Saudi Arabia with our correspondent on Sunday, also stated no date has been communicated to marketers on when Dangote would release petrol to the market. Officials of Dangote refinery have remained mute on this.
“It is a welcome development if the refinery can start releasing PMS this month because as marketers we are currently set to start buying the product from the plant,” Maigandi stated.
The IPMAN president earlier stated that marketers were discussing with the managers of the plant, but not specifically on petrol pricing.
“We have been discussing, but not about the price of petrol yet, rather on other matters such as the registration of members for the purchase of petrol and diesel from the refinery.
“It is true that we have started buying diesel from them, but you have to register with the company first. So a general registration is ongoing,” he explained.
Maigandi, however, stated that though marketers had yet to receive the projected price for petrol from the plant, dealers would want to see a PMS price of about N500/litre from the Dangote refinery.
“We are looking at having it (PMS) at any price below the NNPC rate. The price which NNPC sells petrol is N565.50/litre, so we are expecting something below that price, maybe around N500/litre,” Maigandi stated.
The oil dealers also joined in the call for the provision of crude oil to local refiners, stressing that this would impact positively on the prices of refined petroleum products.
“Of course, it is important for crude to be made available to local refineries because this will surely affect petroleum products’ prices positively,” the IPMAN president stated.
The spokesperson of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, George Ene-Ita, said he was sure that the government has rules for the provision of feedstock (crude) to indigenous refiners.
Ene-Ita promised to supply additional data on the matter, as he expressed that he might not give advance details at the time he was reached by the journalists.
Recall that the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, had prior guaranteed that the government would guarantee that crude oil was provided to domestic refiners.
He stated that in compliance with the provisions of Section 109(2) of the Petroleum Industry Act 2021, the NUPRC in a landmark move, had developed a format directing the exercises for Domestic Crude Oil Supply Obligation.
“The commission in conjunction with relevant stakeholders from NNPC Upstream Investment Management Services, representatives of Crude Oil/Condensate Producers, Crude Oil Refinery-Owners Association of Nigeria, and Dangote Petroleum Refinery came up with the template for the buy-in of all.
“This is in a bid to foster a seamless implementation of the DCSO and ensure consistent supply of crude oil to domestic refineries,” Komolafe had stated.
