Oil marketers are expressing concerns that the recently announced price of N950 per litre for petrol produced by the Dangote Petroleum Refinery may prompt greater importation of the fuel into Nigeria.
This price was revealed by the Nigerian National Petroleum Company Limited (NNPC) on Monday.
Marketers indicated that shipments of imported petrol are expected to begin arriving in Nigeria as soon as today, urging for greater transparency regarding the pricing of products from the Dangote refinery. They also criticized NNPC’s position as the exclusive off-taker of petrol from the $20 billion Lekki-based facility, arguing that this monopoly could hinder competition in the market.
In its announcement, NNPC stated that petrol sourced from the Dangote refinery could be priced over N1,000 per litre in several northern states, with figures potentially reaching N1,019 in Borno and around N999.22 in major cities like Abuja and Kano. In contrast, prices in southern states such as Oyo and Rivers have been set at N960 per litre, while Lagos sees the lowest price at N950.
NNPC spokesperson Olufemi Soneye clarified that the pricing of Premium Motor Spirit (PMS) is determined through negotiations and is not set by the government, in accordance with the Petroleum Industry Act. He added that the petrol loaded on Sunday was paid for in US dollars, with naira transactions slated to begin on October 1, 2024. He emphasized that any disputes over pricing could lead to discounts from Dangote Refinery, which would be fully passed on to consumers.
The Dangote Group has previously disagreed with NNPC’s price announcement, which listed the cost of petrol at N898 per litre.
Importation Implications
Major oil marketers are concerned that the elevated price of Dangote petrol will incentivize increased importation. A source, who wished to remain anonymous, noted that while NNPC and Dangote are expected to manage the situation, many companies will likely turn to imports to meet demand.
“From today, we anticipate the arrival of PMS vessels from various marketers, not just NNPC,” the source stated. “Given the current pricing structure, we could see petrol prices soar to N1,200 per litre at some stations, especially in Lagos. The market dynamics will depend on customer behavior—those willing to wait in line may choose cheaper options, while others may opt for convenience at higher prices.”
Marketers are preparing for a surge in imported products as they secure their shipments ahead of the month’s end, anticipating that the prices set by Dangote will drive further demand for imports.
