While the Nigerian National Petroleum Company Limited (NNPCL) is making moves to end petrol scarcity in Lagos and its environs, the Dangote Refinery and oil marketers have intensified efforts at taking final decisions on pricing and delivery of petrol to filling stations nationwide, ThePostNgr reports.
ThePostNgr recalled that the Dangote Refinery, which can refine 650,000 barrels of crude oil bpd, intends to commence production and distribution of the product, the bulk of which is currently imported from the global market, in May, 2024.
There are indications that the parties have been meeting and exchanging notes on the pricing, distribution and margins to stakeholders in the value chain, including transporters and insurers.
Recall that depot owners buy the product from NNPC Limited at N556 per litre and sell to independents at N640 per litre.
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It was, however learnt that independent markers have proposed N550 per litre to management of Dangote Refinery who is currenty in a discussion with them.
The President of Independent Petroleum Marketers Association of Nigeria, IPMAN, Alhaji Abubakar Migandi Garima, who confirmed the development, said: “We have been discussing with Dangote Refinery. The discussion, centering on pricing, margins and other issues, is still ongoing.
“We have proposed that the lifting price should be N550 per litre in Lagos. The price of the product will differ from one part of Nigeria to another because of distance and cost of delivering petrol to different locations.
“We are currently waiting on Dangote Refinery to conclude and communicate the price per litre, so we can plan to lift the product when it comes on stream.
‘’We expect that the price of the locally refined petrol would be cheaper than imported petrol, due mainly to local availability of the bulk of its crude oil and removal of transportation cost.”
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Similarly, Executive Director, Emmanuel Egbogah Foundation for Petroleum and Energy Industry Economics and Policy Advocacy, Prof. Wumi Iledare, said the coming on stream of Dangote Refinery presented an opportunity for Nigerians to enjoy cheaper prices of petrol now or later.
He said, “The price of petroleum is majorly correlated with the acquisition cost of crude oil. The cost of running the refinery and opportunity cost of capital contribute marginally. Distribution and retailing costs are important but the crude cost matter the most.
‘’Thus, low price of petrol in Nigeria when Dangote Refinery operates at full capacity, is a possibility indeed, ceteris paribus.”
However, President of Crude Oil Refinery-owners Association of Nigeria, CORAN, Mr. Momoh Oyarekhua, said: “ The coming on stream of Dangote Refinery is a very good development, especially as it would reduce huge dependence on imported petrol, conserve foreign exchange and create additional jobs.
“The government needs to support the construction of other indigenous refinery projects, currently at different stages nationwide. We have proposed the creation of $1 billion fund to support local investors.
‘’If this is done, lack of funds, which has always been a major challenge, would to some extent be addressed.
“The federal government and other stakeholders, including the Nigerian Midstream, Downstream Petroleum Regulatory Authority (NMDPRA), should engage with indigenous investors to explore the best ways and means of bringing this into reality in the best interest of oil and gas industry and the nation’s economy.”
