PETROAN Says Cost of Port Harcourt Refinery Petrol is N75/litre Higher than that of Dangote Refinery

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed concern over a N75 per liter price disparity between petrol produced by the newly revitalized Port Harcourt Refinery and the Dangote Refinery.

This revelation came from the association’s Public Relations Officer, Dr. Joseph Obele, during the official reopening ceremony of the Port Harcourt Refinery, which has resumed operations at a production capacity of 60,000 barrels per day.

Dr. Obele, a former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the Port Harcourt Depot, commended the federal government for restoring the old refinery but raised concerns over the higher pricing by the Nigerian National Petroleum Company Limited (NNPCL).

According to Obele, the NNPCL’s petrol is priced at N1,045 per liter, compared to the N970 per liter offered by the Dangote Refinery—a N75 difference.

“The N75 price differential is a steep margin for businesses, particularly for an industry where profitability hinges on competitive pricing,” Obele stated.

He noted that the disparity in prices could affect both marketers and consumers, emphasizing the importance of harmonizing costs to stabilize the downstream sector.

In response to these concerns, the Group Chief Executive Officer of NNPCL, Mele Kyari, assured stakeholders that the issue of price disparity would be addressed. He highlighted ongoing efforts to align pricing to mitigate the financial strain on marketers and consumers while ensuring the refinery’s operations remain sustainable.

Dangote’s Edge and the Demystification of Cost Claims

This development gives the Dangote Refinery a clear market edge, as it positions itself as the cheaper supplier of petrol—a move that could attract marketers and further solidify its dominance in Nigeria’s downstream petroleum sector.

The pricing disparity has also demystified the claim that Dangote Refinery’s products are costlier than imported alternatives. Marketers had earlier claimed that the refinery’s product costs are more expensive compared to imported products.

However, Dangote Refinery’s recent pricing adjustment to N970 per liter has not only undercut the price of petrol from the Port Harcourt Refinery but also challenged perceptions about its cost-effectiveness.

Price has been a contentious issue between Dangote Refinery and marketers since the facility began operations earlier this year. Initially, concerns were raised about the refinery’s ability to offer competitive pricing due to its massive operational costs and private ownership.

However, after negotiations and market pressures, Dangote Refinery adjusted its price downward to N970 per liter, offering an attractive alternative to imported products and now, government-owned refineries.

This strategic pricing has shifted perceptions and given the Dangote Refinery a strong foothold in the market.

The Significance of Port Harcourt Refinery’s Reopening

The resumption of production at the Port Harcourt Refinery is seen as a pivotal step toward reducing Nigeria’s reliance on imported petroleum products. Stakeholders have welcomed the move, emphasizing the broader benefits of enhanced local refining capacity.

While the refinery’s current output of 60,000 barrels per day is modest compared to national demand, it marks progress in revitalizing Nigeria’s aging refinery infrastructure.

The refinery is seen as a huge reprieve for consumers in Eastern Nigeria, who historically pay higher than their counterparts in the Southwest due to the high cost of logistics. The Port Harcourt Refinery being close to the region is expected to significantly cut the cost of logistics, lowering the pump price.

However, with this development, marketers are likely going to stick with Dangote Refinery unless the NNPC honors its pledge to ensure harmonized pricing.