MAJOR marketers have confirmed sourcing their petroleum products from cheaper sources due to the total deregulation of the petroleum downstream sector and pricing concerns with Dangote Refinery management.
Some of them have continued importing, raising concerns about pricing modalities from Dangote Refinery which was widely believed could be lower while also meeting up with local fuel demands of 50 million litres.
To state the least, the Nigeria Petroleum Company Limited (NNPCL) owns a stake in the Dangote Refinery. However, the group chief executive officer of Dangote Group, Aliko Dangote, has voiced concerns over low patronage from oil marketers and the NNPCL.
“We are currently hearing from some marketers that importation is N80 cheaper when compared with Dangote’s price. Just like any business marketers are looking for cheaper sources for their products. For now, Dangote is not offering a cheaper price,”Adetunji Oyebanji, former chairman of the Major Oil Marketers Association of Nigeria (MOMMAN) told NewsNGR.
This response followed a recent appeal by the chairman and chief executive of Dangote Group-Aliko Dangote, who expressed concerns over poor patronage from marketers and the NNPCL.
Recall that Dangote had decried poor patronage from marketers and the Nigerian National Petroleum Company Limited-NNPCL, appealing for committed patronage.
He disclosed that the refinery could produce over 30 million litres daily at full capacity and was holding 500 million litres in reserve, enough to supply the country for over 12 days without imports.
In a swift reaction to possible reasons for poor patronage from marketers, the former chairman of the major oil marketers association of Nigeria (MOMMAN), Adetunji Oyebanji told NewsNGR that pricing reasons could be one of the major causes of low patronage concerns from marketers and the NNPCL.
“If the marketers are not patronising you, there must be a reason. For me, any reasonable person would ask questions about pricing, and terms to customers, asking them to pay upfront or price variations.
“His comments need more interrogation and he should speak to why marketers are not patronising him. As a business person with good payment terms and pricing, the customers will come to you. What he’s doing is more like whipping up sentiments, “he added.
“What I am hearing from some colleagues is that it’s about N80 cheaper to import than to buy from him. I know he’s in business and has to repay the $20b billion loan, but he has to pay attention to pricing,” he said further.
Commenting further on the development, the president of petroleum retail outlets owners of Nigeria (PETROAN), Billy-Gillis Harry, told NewsNGR that Dangote has to come clear with his business terms in order to do business with marketers.
“PETROAN is ready to buy from him as we have thousands of retail outlets willing to do business with him. However, he needs to make the business terms very clear to us. We need to know the pricing, and we need to understand properly the terms.
He said, “There has to be dynamics in terms of profit projections, payment terms, pricing because we’d need to be sure of paying for product N10,50 and the price not dropping before we finished loading. This is about market dynamics and pricing.
He added, “I sent the same letter to him (Dangote) yesterday, October 30,2024, to ask for a meeting, so, we can determine the modality of business. We cannot drive our tankers into the Dangote refinery to start buying products just like that. We must have a business meeting to determine the modalities, make our inputs, and compare notes.
Since President May 29, 2023, announced the end of the fuel subsidy, petrol prices have soared from N145 to over N1,000, intensifying the financial strain on citizens.
“We are still in the season of price movement and the effects of fuel subsidy removal are taking its toll on price stability. Let’s give it more time and let everything stabilise, “Billy-Gillis Harry added.