Marketers  to  import petrol as NNPCL, Dangote's talks drag

Oil marketers may begin importing Premium Motor Spirit, commonly known as petrol, following the Nigerian National Petroleum Company Limited's declaration that it would only fully offtake the product from the Dangote Petroleum Refinery if the market prices were higher than the pump prices in Nigeria. 

NNPC also stated that Dangote and other domestic refineries were free to sell directly to any marketer on a willing buyer, willing seller basis, and that it had no desire or intention to become the distributor for any entity in a free market environment.

This contradicts the statement made by the President of Dangote Group, Alhaji Aliko Dangote, who had stated that the refinery was waiting for NNPC and that the national oil company would be the only off-taker of its petrol domestically.

Reacting to the slowdown in discussions between Dangote and NNPC, oil marketers stated that they would only source the product from wherever they found it cheaper, which could be through importation.

The National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, stated that they have not yet contacted Dangote regarding the price of their petrol, but they may do so this week to inquire about it.

He mentioned that if the price is competitive enough for them to make a return on their investment and the required margin, they would not mind purchasing directly from the Dangote refinery to complement what the NNPC is bringing in or what the NNPC would buy from Dangote.

Zarma confirmed that since the Federal Government and NNPC had said the Dangote refinery would sell its product at the market price, this implied that the government would not intervene in the pricing of the commodity from the plant through subsidy.

Based on this, he noted that other dealers now had the opportunity to source the product from any producer at a cheaper price, whether locally or internationally.

He noted that some oil marketers currently imported diesel, while others bought the product from Dangote, adding that a similar situation would play out in the purchase of petrol, going by NNPC's recent position on Dangote petrol.

"I believe that we are going to analyse the price of Dangote petrol and see the advantages of buying from Dangote viz-a-viz importation. Whichever we feel is cheaper will automatically attract everybody, especially if importation is cheaper.

"That will bring about competition and I don't think the government will allow price monopoly. They would want a competitive market where the laws of demand and supply would determine the local price of refined petroleum products, just like diesel is right now.

"And with that, there is going to be some kind of equilibrium in the pricing and there is going to be guaranteed sustainability of supply," the IPMAN official stated.

Industry observers say the Federal Government seems not ready to stop fuel importation following the refusal of NNPC to be the off-taker of Dangote's petrol.

They, however, noted that with the recent hike in the pump prices of petrol, the government was systematically stopping subsidies on the commodity, following the recent revelation by NNPC that it spent over N7.8tn subsidising petrol.

At the presentation of the audited report and accounts of NNPC for the 2023 business year in Abuja last month, NNPC's Chief Financial Officer, Umar Ajiya, admitted that the oil firm was shouldering a heavy subsidy burden on petrol imports.

He said the government directed NNPC to sell the petrol it imported at a price that is half the landing price.  According to him, at times the Federal Government paid the money and it could as well net off for it.