Independent petroleum marketers in Nigeria are optimistic that the upcoming Dangote Petroleum Refinery will price its Premium Motor Spirit (PMS), commonly known as petrol, between N600 and N650 per litre when it enters the market. The refinery, a $20 billion investment by billionaire Aliko Dangote, is anticipated to impact the national fuel pricing structure significantly.
According to Hammed Fashola, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), the new refinery could substantially reduce fuel costs. Fashola explained that the Nigerian National Petroleum Company Limited (NNPC), the primary importer of PMS, currently sells petrol to marketers at around N570 per litre. However, due to high mark-ups by private depot owners, many IPMAN members end up purchasing petrol at prices exceeding N700 per litre.
Fashola stated, “We are hopeful that with Dangote’s entry into the market, the price of petrol could drop to between N600 and N650 per litre. N600 would still be a reasonable price, but it depends on Dangote’s production costs and crude supply conditions. The NNPC’s pricing includes subsidies or under-recovery elements which might be obscured.”
The IPMAN leader recalled how the Dangote refinery had previously reduced diesel prices. “When Dangote started producing diesel, prices fell from around N1,600 to N1,000 per litre, and now it’s approximately N1,150 to N1,200 per litre. We hope for a similar effect with PMS,” he said, though he acknowledged that ongoing crude supply challenges could affect this outcome.
Fashola revealed that IPMAN is in discussions with Dangote officials about potential partnerships and is awaiting further developments. Despite high expectations, the refinery, with its 650,000 barrels per day capacity, faced delays in commencing petrol production, attributed to ongoing crude supply issues.
The Dangote Group had earlier projected that petrol production would start between August 10 and 12, 2024, but these plans have yet to materialize.