Stakeholders Optimistic About Lower Prices As Dangote Refinery Petrol Hits Markets

Stakeholders Optimistic About Lower Prices As Dangote Refinery Petrol Hits MarketsOn September 3, 2024, Aliko Dangote, President of Dangote Group, officially announced the launch of petrol from the Dangote Refinery.

The Federal Government, through Finance Minister Wale Edun, confirmed on Friday that all agreements have been finalized for the Nigerian National Petroleum Company Limited (NNPCL) to begin offtaking petrol from the refinery on Sunday.

Part of this agreement includes NNPCL supplying Dangote Refinery with approximately 385,000 barrels of crude oil per day by October 1, 2024.

Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), told  the start of petrol production from Dangote Refinery will resolve fuel supply challenges in Nigeria. He also expects this move to lead to lower fuel prices, although marketers are still waiting for the refinery’s pricing template.

“It’s a positive development. Rather than spending foreign currency to import fuel, we are now producing locally. This will help the Naira appreciate. We anticipate product availability and a drop in pump prices. As long as we pay in Naira for the petrol, we expect prices to decrease,” Maigandi stated.

When asked why NNPCL is the only offtaker at the moment, he explained, “If the government has decided to begin with NNPCL, that’s fine. PMS is a sensitive product, so it’s important that the government oversees the initial distribution.”

Regarding the potential for direct offtake partnerships with Dangote Refinery, Maigandi confirmed that discussions are ongoing, but emphasized the need to first see how the partnership with NNPCL unfolds.

Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association (PETROAN), also expressed optimism, noting that marketers would welcome cheaper fuel from Dangote Refinery. However, he voiced concerns over the lack of clear communication on pricing.

“We’re happy to work directly with Dangote Refinery, but clear communication is essential. We’ve reached out, but dialogue has stalled. We’ve heard rumors about pricing, but that’s not how business should be conducted. Nigerians deserve affordable fuel, especially since this product is produced locally,” Gillis-Harry said.

Sources suggest that Dangote Refinery may price its petrol around N766 per liter, though official pricing is yet to be confirmed.