President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, said Independent Petroleum Marketers Association of Nigeria (IPMAN) members had yet to receive the price of the product from the Nigerian National Petroleum Company (NNPC) Limited, the sole off-taker of petrol from Dangote.
“We are hearing of different prices, but we have not heard from NNPC directly on the amount that they would want to sell the product to us. Remember that NNPC is the sole off-taker of the petrol from Dangote refinery. So, we are still waiting to hear from them.”
But a major oil marketer said they got petrol from NNPC at N766/litre, stressing that some major PMS dealers would start loading the product allocated to them by NNPC from Dangote refinery beginning from Monday.
“When NNPC gives marketers allocation, they (marketers) will simply go to Dangote to pick up. The payment will be to NNPC, while NNPC in turn pays to Dangote,” the source, who spoke on condition of anonymity because he was not authorised to speak on the matter, stated.
The official added, “NNPC sells to marketers at N766/litre, NNPC buys from Dangote at N898/litre. Marketers are supposed to mobilise their trucks to Dangote, pick up products, and then take them to their stations. The cost of transporting, fees, and other logistics will be borne by the marketers.”
It was gathered that the major marketers involved in this arrangement include Conoil, NIPCO, Total, Mobil, Oando (NNPC Retail), Adova and Depots and Petroleum Products Marketers Association of Nigeria members.
Market forces
The Executive Vice President of Downstream at NNPC, Dapo Segun, in a video shared to one of our correspondents on Sunday by the media department of the company, said the cost of petrol would be determined by market forces.
“NNPC is not a regulator. NNPC has no regulatory powers. We can’t say NNPC sets the price. The government is not involved. It is the market forces that set the price. So, Dangote says to us, ‘this is how much I want for it,’ and we say, ‘hey Dangote, if we go out there we can get it for this much. So, we won’t pay you this much for it.’ And we got into the negotiations, which took over a week. They come with their position, we come with a counter; they come with their revised position and we will counter it. And at the end of the day, we were able to reach an agreement on the price to pay for it,” he said.
On crude sale to Dangote, he said, “Payment will be done in naira. So, when the refinery buys a barrel of crude for $80, it is still $80. When the payment is due, it will be converted on that due date to naira and it will be paid in naira.
“The marketer, of which NNPC is one, goes to the refinery to buy the product in bulk in dollars, when that payment is due, instead of NNPC going to the market to chase dollars, NNPC pays for that product in naira. So, that is what it is. It is a simple payment solution, no more, no less.”
Fuel scarcity
Speaking with journalists at the loading point on Sunday in Lagos, the Vice President of Dangote Industries Limited, Devakumar Edwin, stated that the latest development would resolve the fuel scarcity debacle that had repeatedly affected the country for 52 years.
He noted that the refinery’s production capacity was extensive, adding that it could fulfil all of Nigeria’s needs and still have a substantial surplus for export.
He said, “Well, to quote my president, 52 years the country has been talking about resolving the problem of PMS and now we can produce PMS with a facility within Nigeria.
“The production capacity is so large that we can meet all the requirements of Nigeria and we have a huge surplus to export. So, this is a huge moment of pride for every Nigerian because this is a Nigerian-owned refinery built by a Nigerian and now producing PMS for Nigeria.”
He added that at full capacity, the refinery would load 290 tankers per day.
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.