In a bid to counter rising fuel costs, oil marketers in Nigeria have announced plans to import Premium Motor Spirit (PMS) at prices notably lower than those set by the Dangote Petroleum Refinery.
The marketers’ strategy responds to the high prices of locally refined petrol, which reportedly range between N1,015 and N1,028 per liter, depending on purchase volume. Meanwhile, data from the Major Energies Marketers Association of Nigeria (MEMAN) highlights a landing cost for imported PMS at N978.01 per liter as of October 31, 2024, with diesel and aviation fuel at N1,069.97 and N1,119.67 per liter, respectively.
Based on this, some energy analysts have argued that there is no way imported fuel could be cheaper than Dangote’s refined products unless it is subsidized.
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The disparity between Dangote’s local prices and import costs has spurred interest among marketers in offering more affordable alternatives. Dr. Joseph Obele, Publicity Secretary of the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN), stated that the association is preparing to sell imported fuel at approximately N800 per liter, once regulatory approvals are in place. According to Obele, PETROAN has secured partnerships with international suppliers and awaits only final import authorizations to initiate these imports.
Obele expressed confidence that their imported fuel would not only be significantly cheaper than Dangote’s PMS but also undercut prices from the Nigerian National Petroleum Corporation Limited (NNPCL).
“We are calling on the regulatory agency to release our authority to import in no distant time so our first stock will come in,” he added.
However, this move appears to be at odds with the Dangote Refinery’s ambitions. Market insiders have noted that Dangote is reportedly pressing for a halt to fuel imports, arguing that the price gap between his refinery’s products and imported fuel could deter local demand.
A spokesperson from Dangote Group, Tony Chiejina, dismissed the circulating reports of the refinery’s high pricing as “fake news” but did not disclose the actual rates, leaving the market rife with speculation.
Meanwhile, Dangote Refinery has also faced criticism from the Independent Petroleum Marketers Association of Nigeria (IPMAN), whose president, Abubakar Garima, claimed members were unable to load petrol from the refinery despite having paid N40 billion to NNPCL.
Addressing these accusations, Dangote Refinery clarified in a statement that it has no direct business dealings with IPMAN at present. It emphasized that IPMAN’s payments had been made through NNPCL, not directly to Dangote, and stated that the refinery had neither received payment nor authorization from NNPCL to release PMS to IPMAN.
Chiejina asserted that the company is more than capable of meeting the country’s petroleum demands, with a daily loading capacity of 2,900 trucks and the ability to transport fuel by sea.
Dangote Refinery cautioned against what it termed “public speculation and unpatriotic media conflicts” that could undermine President Bola Tinubu’s economic policies.
“We advise IPMAN to register with us and make direct payment as we have more than enough petroleum products to satisfy the needs of their members,” stated Chiejina.
The refinery reiterated its commitment to fulfilling national fuel demand and advised IPMAN to register directly with Dangote to facilitate future transactions.
The ongoing pricing dispute between the Dangote Refinery and oil marketers is deepening Nigeria’s fuel supply challenges, with both sides maneuvering to secure their market share. The conflict has escalated as local marketers push back against Dangote’s pricing, sparking a fresh scramble for cheaper imported alternatives. The impact of this dispute is being felt across the country, as it adds to existing strains on fuel availability and accessibility for consumers already grappling with high prices.
IPMAN has echoed PETROAN’s stance, claiming that the Dangote Refinery’s prices are not competitive with imports.
“The price of fuel from Dangote refinery was higher than the cost of commodities imported,” noted Yakubu Suleiman, IPMAN’s National Assistant Secretary.
Against this backdrop, Dangote Refinery is eyeing buyers outside Nigeria, looking to offset the reduced demand locally due to high pricing. According to the company, which has invested heavily in building Africa’s largest refinery, its production capacity is well above Nigeria’s demand, with a daily output that can load up to 2,900 trucks and supply fuel by sea. But with the pressure mounting at home, the refinery is increasingly seeking to sell its products to other African nations and international buyers willing to pay a premium.
This standoff is casting a shadow on the refinery as an answer to Nigeria’s quest for energy sufficiency. While the Dangote Group has poured $20 billion into the refinery to reduce Nigeria’s reliance on imports, it now finds itself at odds with a local market that seems unwilling to meet its price expectations. The refinery’s pricing and move to restrict imports are seen by some marketers as efforts to maintain a monopoly on fuel supply in Nigeria, which has only deepened the rift.
In the meantime, local fuel availability remains under strain as the uncertainty surrounding import approvals and the viability of Dangote’s pricing model lingers. Industry analysts suggest that if this pricing conflict persists, it could further disrupt Nigeria’s already fragile fuel distribution network, leading to potential price hikes at the pump and impacting the country’s broader economy.