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  • Marketers await Dangote petrol

    Marketers await Dangote petrol

    Marketers were yesterday on the lookout for the direct delivery of petroleum products from Dangote Refinery.

    Independent Petroleum Marketers Association of Nigeria (IPMAN) National President, Alhaji Abubakar Maigandi told The Nation that although loading began at the gantry, the trucks were yet to arrive any retail outlets at press time.

    He said: “We are still waiting. However the trucks have started loading from the gantry but they are yet to arrive at the filling stations as at today.”

    The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) National President, Dr. Billy Harry said Dangote vowed to commence the distribution delivery yesterday (Monday).

    He said consequently, the marketers were awaiting deliveries.

    READ ALSO: Six major markets in Lagos for buying cheap foodstuffs

    “The Dangote Refinery said he will start today (Monday) but we are still waiting for him,” Harry said.

    On June 15, the refinery dropped a hint that it will be distributing petroleum products directly to the end-users.

    Stakeholders, including the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), the Nigerian Association of Road Transport Owners (NARTO), PETROAN kicked against it.

    The associations described it as a monopolistic plot to phase out middlemen from the value chain.

    The National Union of Petroleum and Natural Gas Workers (NUPENG) has sustained its opposition to the refinery over workers’ unionization.

  • Nigerians will smile once we begin lifting Dangote petrol, says IPMAN

    Nigerians will smile once we begin lifting Dangote petrol, says IPMAN

    • PETROAN insists on fuel importation

    The National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), yesterday assured that Nigerians have nothing to worry about immediately the association begins to lift premium motor spirit (PMS) directly from the Dangote Refinery. He said with the sale of crude oil to the refinery in naira, Nigerians would be the better for it.

    Notwithstanding the IPMAN pronouncement, oil marketers, under the aegis of PETROAN (Petroleum Retail Outlets Owners Association of Nigeria), said they’ll go ahead on continuing the importation of fuel into the country.

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    Nonetheless, Maigandi assured that there was no cause for alarm. He spoke with The Nation while reacting to reports that the Nigerian National Petroleum Company (NNPC) Limited, has officially ended its exclusive purchase agreement with Dangote Refinery, thereby opening up the market for other marketers to directly buy petrol from the 650, 000 barrels per day capacity refinery.

    Although neither NNPCL nor Dangote Refinery has confirmed nor denied report, the development signifies that NNPC will no longer act as the sole off-taker, allowing marketers to negotiate prices directly with Dangote Refinery..

     “This is a welcome development for us (IPMAN), “Maigandi said, adding,“if NNPCL can buy directly, then why can’t we buy directly?; this thing about price shouldn’t be a concern. We are buying petrol at over N800 per litre from NNPC. I don’t want to say much about this but let’s see how everything works out.

    “The sale of crude oil in naira to Dangote Refinery I believe will make the price to be favourable.  We, as IPMAN, are ready for business. Nigerians should not panic about the pricing because immediately we start lifting directly from Dangote Refinery given the naira sales regime, they will laugh, it is a promise,” Maigandi assured.

    According to him, the independent marketers, prior to yesterday, had not been buying Dangote petrol from the NNPCL because the association was awaiting at what price it would be sold to them. “All the while we haven’t been buying (Dangote petrol) directly from the NNPCL till now because we were still awaiting how they would sell the product from Dangote Refinery to us; so anyhow they want to sell to us is fine, but we prefer taking it directly from Dangote Refinery, that is the best option for us,” he said.

    The Chief Executive Officer, Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, however noted that there is need for more clarification from the NNPCL because it is glaring that as a matter of state policy, there is still some measure of subsidy in the current PMS pricing. This, he argued, was what created a situation where it was only the NNPCL that was buying petrol from Dangote Refinery ab initio and selling to other marketers at a rate that was marginally subsidized.

    According to Yusuf, it is important to now clarify whether government has now taken a decision to do away with subsidy and expose the citizens and marketers to the full elements of market forces.

    He argued that Dangote Refinery is a private business entity that obtained loans for its business and has to recoup and repay its creditors. Therefore, he further explained, if all marketers buy directly from Dangote, it means subsidy has been completely removed because it would be sold at market price.

    The CPPE boss also noted that with the recent policy of crude sale in naira to the refinery, it may be possible for the Dangote refinery to now sell to marketers directly at the same price NNPCL may have been selling to them.

    “If this can accommodate preserving the price NNPCL was selling to marketers, that will make up for the subsidy that had existed before and that will be great for all,” Yusuf said.

    Notwithstanding, he made it known that there is a need for policy direction on this development so that there is no confusion that may cause another round of petrol scarcity and create another confusion.

    “It is important to note that this is not a time to embark on a policy that will further increase the cost of goods and services because the citizens are already over stretched, businesses are suffering inflation is very high.

    “So from a social perspective, it is not a good policy decision to completely deregulate the prices of petrol at this time because of what Nigerians are going through. NNPC needs to speak out because the more they keep quiet then the more they create room for all manner of innuendos which could also create a lot confusion. It is advisable that government should sustain the marginal subsidy it is giving on petrol in the interest of the vulnerable in the society,” Yusuf said.

    Meanwhile, petrol marketers under the aegis of Petroleum Retail Outlets Owners Association of Nigeria (PETROAN) yesterday insisted they are currently negotiating to import 100,000 metric tons of the product monthly.

    According to the association, depending on the domestic refineries for petrol has crippled their businesses to the extent that only 500 out of over 6,000 retail outlets are still operational.

    The situation may liquidate their businesses and place them under the receivership of their lenders if they do not seek alternatives to Dangote Petroleum Refinery and Petrochemicals that is interested in the export market and the Nigerian National Petroleum Company Limited (NNPCL) that its Port Harcourt Refinery has failed to commence production at the August target.

    PETROAN President, Dr. Billing Harry made this known to The Nation. “We are exploring the possibility for us bringing our own product. We are advancing on that. We are trying to arrange to bring 100,000 metric tons per month,” he said, adding that the move is still in the pipeline.

    He explained that his association is tired of depending on the 650,000barrels per day Dangote plant, whose body language has indicated that the company is more interested in the export market. Aside from that, he said the refinery has kept them guessing for too long without communicating its terms of engagement to them.

    “That is the only option because we can’t depend on Dangote. Dangote clearly has his mind more focused on the export market,” he added.

    According to him, there was a speculation that the refinery has planned to sell the product to them directly. He wondered why the company refused to inform the marketers since it has the different associations phone numbers.

    He urged the refinery to partner directly with PETROAN, which has over 6,000 retail outlets.

    Harry said “NNPCL, from rumour, we are hearing NNPCL is saying he (Dangote) can deal with us directly. That is not the way to work. We should be able to talk to him (Dangote). We should be able to hear from him. There is no need to say we want to sell to you when you can reach us and we can agree or disagree instantly.”

    Meanwhile, Harry said it was surprising the marketers were yet to get an official communication about the pricing from the refinery.

    According to him, it was through the rumour mill the members learnt the refinery would sell petrol at N766 per litre.

    He said surprisingly, the refinery and NNPCL were yet to agree on one pump price.

    On how the state-owned NNPCL has dashed the high hope of commencing production from its Port Harcourt Refinery in August, he recalled the members were patriotically waiting for Dangote to produce its fuel but since the product cannot get to them they have to seek alternatives.

    His words: “PETROAN has been in the forefront of insisting that in-country refining of product should be the order of the day.

    “If we have a petroleum product that is refined in Nigeria and not being able to reach us in distribution, then we have to find alternative methods.

    “Port Harcourt Refinery we expected and anticipated that at least August we should have started doing public business, we didn’t see that and we also have not heard any definitive and productive business engagement.

    So when there is that situation, we have over 6,000 retail outlets, out of which number that is doing business is not up to 500. You can say that is a redundant business and before you know our financial partners will start calling for our retail outlets and therefore cripple us. So, if there is any option we can get we have to get it.”

  • Dangote petrol’s uneasy start

    Dangote petrol’s uneasy start

    We expect a quick resolution of the  teething problems to maximise the benefits of the project

    Although nearly overshadowed by needless tiffs and brickbats, September 15 turned out to be that historic moment that Nigerians had long hoped, and prayed for: the sight of hundreds of trucks rolling into the gantry of the $20 billion, 650,000 barrels per day Dangote Refinery to lift premium motor spirit, (petrol).   Surely, the significance of the moment cannot be overstated. This is a product whose consumption of foreign exchange is put variously at anything between 35 to 40 percent of the nation’s entire foreign exchange outlay. Nigerians will also recall that this is a product over which citizens had for years been locked in combat with the government and the Nigerian National Petroleum Company (NNPCL) over the question of importation and pricing. That the product is finally coming to join the league of other fuels from the refinery after delays, recriminations, allegations and counter-allegations of sabotage and other institutional challenges; surely, the moment cannot but signal an important step forward in the nation’s long journey towards domestic energy sufficiency.

    For plodding on despite the odds, Aliko Dangote, the visioner deserves commendation; no less deserving however is the Federal Government for providing the required fiscal muscle to ensure its realisation.

    Yet, as important as this latest milestone is, the road ahead would appear no less bumpy still. As it is, Nigerians’ expectation of immediate reduction in product prices would appear, not only unrealistic, but unlikely to happen anytime soon. Although an interim arrangement is reportedly in place under which the NNPCL would serve as the off-taker of the product, one contentious issue that came up last week was how much the NNPCL actually bought the product from the refinery. Whereas the company claimed to have bought the product at N898 per litre from the refinery, the refinery management on its part had described the claim as ‘misleading and mischievous’, without telling Nigerians its own version of truth, thus leaving Nigerians with wild guesses as to who between the two was not telling the whole truth.

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    Howbeit, if the forth and back argument is any indication of the government’s resolve to yield the space to the forces of the market, the adjustment in the pump prices that followed would appear to be the final seal. One other issue that also emerged is the capacity of the refinery to meet the needs of the market. Again, whereas Nigerians were led to believe that the refinery would deliver 25 million litres daily to the market, to be raised to 35 million by October, it emerged that it could only deliver 10.3 million litres in the first three days as against 75 million, thus raising fresh fears about its actual readiness to meet market demands. In fact, the situation was said to have heightened concerns about product’s future availability in the situation that NNPCL had banked on the 25 million litres per day supply from the refinery. Nigerians expect that the Dangote Refinery would be more forthcoming on the situation.

    In all, it might well be that a number of the challenges that have emerged in the past weeks are not entirely unexpected. Nonetheless, the expectation is that these would be tackled swiftly and decisively. Whether the issue is in the domain of equitable pricing or product supply guarantees, Nigerians, it needs to be said, have certainly gone too far in this journey to contemplate looking back. Just as Nigerians expect Dangote Refinery to step up the game, NNPCL, as the supplier of last resort, owes Nigeria a duty of ensuring product availability, at least until the sector fully stabilises. We expect the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure that every player acts in accordance with the rules. Same with the Federal Competition and Consumer Protection Commission (FCCPC); the commission might want to take a more than passing interest in the activities of the disparate actors in the fuel supply chain, given the near limitless capacity for collusion and other anti-competition practices known to exist in the industry. In all, the era of product shortages should be consigned to the past.

  • ‘Dangote won’t sell petrol below cost’

    ‘Dangote won’t sell petrol below cost’

    Managing Director, Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane has offered critical insights into the dynamics of refinery operations and the realities of fuel pricing amidst global economic pressures.

    Rewane addressed the complex interplay between refinery operations and market forces, emphasising that refineries, including the newly inaugurated Dangote Refinery, operate within a business framework aimed at profitability.

     “I think we should get one thing clear. One, the refinery or any refinery for that matter, apart from government-owned refineries, are a business to produce as a profit.

    “They will produce at a point where their marginal cost equals their marginal revenue. They will not sell below cost,” Rewane said.

    This principle, Rewane said, underscores a critical reality: despite the excitement surrounding the Dangote Refinery, which stands as the largest single-train refinery in the world, the price of petrol remains subject to broader economic factors.

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     “Nobody goes into business to sell below its cost price. If they did that consistently, they would go out of business,” Rewane explained.

     “So, Dangote would not have been where he is today if he was doing that.”

    Rewane explained that, for Nigerians, the current economic climate is marked by high fuel prices, scarcity, and a lack of reliability but emphasised the refinery’s commitment to improving quality and consistency.

     “What are Nigerians struggling with today? They are struggling with the high price of petrol, unavailability and uncertainty as to when you will get it. Then also about quality. So, if you take those three things together, what Dangote Refinery is assuring the country is that one, we will assure your quality, we will assure your quantity,” Rewane said.

    He, however, acknowledged “that pricing is not necessarily in the hands of Dangote Refinery, but in the hands of the market.”

    The impact of the naira devaluation on fuel prices, he noted, cannot be underestimated.

    With the global crude oil market and the dollar-denominated costs of refinery operations, Rewane maintained that local prices are inherently linked to international market dynamics.

    He said: “The market determines the price, including the crude, global crude price, a guaranteed margin, and the cost of processing. It’s as simple as that.”

    According to him, the recent commissioning of the Dangote Refinery is indeed a milestone, marking a significant step for Nigeria’s oil sector. However, he stressed that while this achievement is commendable, it does not automatically translate into lower fuel prices.

     “Yes, it’s good to know that petrol is being lifted. It is a milestone from our own refineries, which we had before. But now we have the largest single-train refinery in the world.

     “We have it as a result of the initiative of Alhaji Aliko Dangote to accomplish this feat. But now it is business time. It’s time for us to price the commodity at the market and ensure that one, we sustain it, two, the quality is guaranteed, and three, the quantity is there for us.”

    Rewane also cautioned against overly optimistic expectations while highlighting the importance of acknowledging the economic realities that drive fuel pricing and the potential for continuing uncertainties.

     “The downtime of Nigeria’s queuing up and the uncertainty that goes with all of this is actually destructive to value in the country. I think that we should celebrate the commissioning, but we should also use this as an opportunity to reflect on the pricing mechanism that will keep us in business. If not, it will go the same way as all the other sad stories we’ve had in the past,” Rewane added.

  • Marketers to NNPCL:  announce pump price for Dangote petrol 

    Marketers to NNPCL:  announce pump price for Dangote petrol 

    The National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abubakar Maigandi, disclosed on Sunday, September 15, that his members are eagerly awaiting the Nigerian National Petroleum Company Limited (NNPCL) to announce the new pump prices for Premium Motor Spirit (PMS), also known as petrol. 

    In a phone interview with The Nation, Maigandi revealed that Dangote Refinery Limited (DRL) is set to sell the product to NNPCL, the sole off-taker, at a rate of N776 per litre.

    Expressing the anxiety of his members, the IPMAN boss said: “NNPCL is lifting petrol at N766 per litre from Dangote Refinery. Since the National Oil Company is the sole off-taker of the product, it should announce to marketers how much they will buy and sell it.”

    He described the production of PMS from the N650 barrels per day refinery as a welcome development that will guarantee energy security in the country.

    But NNPCL, Chief Corporate Communications Officer, Olufemi Soneye described the price as untrue based on industry reality.

    He said: “You’re in the sector, my bro. You should know whether stories are true or not. How can this be true?”

    Read Also: Dangote petrol: What’s next?

    Asked whether his members have been patronising the local refinery for Automotive Gas Oil (AGO), Maigandi said yes.

    He however confirmed that some depot owners still import the diesel.

    On whether the imported AGO is cheaper than Dangote’s, Maigandi said: “If you see people importing it, it means the imported one is cheaper.”

    Similarly, the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Executive Secretary, Mr. Olufemi Adewole said owing to crashing crude oil prices, imported products might be cheaper than Dangote’s own.

    He said: “With falling crude oil prices, except DR had hedged its crude oil purchases, imports might (repeat ‘might’) soon be cheaper.”

  • Increase in petrol price insensitive, Reps Minority caucus tells FG

    Increase in petrol price insensitive, Reps Minority caucus tells FG

    The Minority caucus of the House of Representatives has called for the immediate reversal of the recent increase in prices of Premium Motor Spirit (PMS), saying it will no doubt increase the suffering of the Nigerians. 

    The caucus said in a statement the unilateral action of increasing the price of PMS disregards the principles of transparency, accountability, and fairness, which should guide decisions affecting the lives of the citizenry. 

    The statement by the Minority Leader, Hon. Kingsley Chinda titled “reverse petrol prices now” asked the President to immediately put in place urgent measures to  address the connection between dire economic conditions and social unrest rather than create conditions  that exacerbate the already dire economic conditions. 

    It said the decision to increase the price of petrol was ill timed and grossly insensitive yo the current economic realities in the country. 

    The caucus also said that the decision by NNPCL to increase prices was taken without due consultation with relevant stakeholders, including the National Assembly. 

    The statement reads: “The Minority Caucus of the House of Representatives vehemently condemns the recent announcement by the Nigerian National Petroleum Corporation (NNPC) to increase the price of petrol. 

    “This development is not only ill-timed, but also grossly insensitive to the harsh economic conditions currently being experienced by Nigerians across the country.

    Read Also: Increase in petrol price insensitive, Reps Minority caucus tells FG

    “At a time when the nation is grappling with unprecedented economic challenges, including rising inflation, unemployment, and the depreciating value of the Naira, any further increase in the price of petrol will only exacerbate the suffering of the average Nigerian. 

    “The ripple effects of such an increase are far-reaching, impacting the cost of transportation, food, and other essential goods and services. This will ultimately erode the already fragile purchasing power of millions of our citizens, pushing more families into poverty.

    “The Minority Caucus is deeply concerned that this decision by the NNPC appears to have been made without adequate consultation with relevant stakeholders, including the National Assembly, which represents the interests of the people. 

    “This unilateral action disregards the principles of transparency, accountability, and fairness, which should guide decisions affecting the lives of the citizenry. 

    “The current dire economic conditions, characterized by rising unemployment, soaring inflation, and widening inequality, have placed immense pressure on the livelihoods of citizens. These hardships have understandably triggered widespread protests, as people demand relief and accountability from those in power. 

    “The resulting unrest and chaos serve as stark reminders that economic instability can quickly escalate into broader social and political instability. 

    “While it is crucial for all stakeholders, including government, businesses, and civil society, to work collaboratively to address these economic challenges and restore stability, before the situation deteriorates further, Tinubu’s government should as a matter of urgency address the connection between dire economic conditions and social unrest rather than create conditions  that exacerbate the already dire economic conditions. 

    “Not doing so merely provides filips to the army of youths who are jobless to return to occupy the streets and unleash violence on our country. This government must learn lessons from destructive effects of the national protests against bad governance, triggered by depressing and excruciating economic conditions.

    “We, therefore, call on the Federal Government to urgently intervene and reverse this unwarranted increase in petrol prices. We also urge the government to explore and implement more sustainable measures to stabilize the economy without placing an additional burden on the people. 

    “This includes prioritizing the rehabilitation and upgrading of our local refineries, curbing corruption within the petroleum sector, and ensuring that subsidies genuinely benefit the masses rather than a few privileged individuals.

    “The Minority Caucus stands with the Nigerian people in rejecting this petrol price hike and will continue to advocate for policies that prioritise the welfare and well-being of all citizens. We urge the government to listen to the voice of the people and take immediate steps to alleviate their suffering, rather than aggravate it.”

  • Dangote petrol: What’s next?

    Dangote petrol: What’s next?

     Sir: Alhaji Aliko Dangote envisioned ending Nigeria’s reliance on fuel importation and making sub-Saharan Africa self-sufficient in energy. This vision led to the construction of the world’s largest single-train refinery, a 650,000-barrel-per-day facility located in Lagos State.

    Just days before handing over power to President Bola Ahmed Tinubu, President Muhammadu Buhari commissioned the Dangote Refinery as a parting gift to Nigerians. However, a time passed without petroleum products from the refinery being made available, initial excitement gave way to scepticism. Even when hope was rekindled at some point, controversies began to surface regarding the supply of crude oil to the refinery and its subsequent refining process.

    Amidst these controversies, Dangote Group’s Chief Executive Officer, Aliko Dangote, publicly accused the Nigerian National Petroleum Corporation Limited (NNPCL), International Oil Companies (IOCs), and a cartel in the energy sector of denying him crude oil supplies, thereby sabotaging his efforts to make Nigeria energy-sufficient. The situation raised questions about whether those in power genuinely want the country to succeed. However, the phase would end with President Tinubu’s intervention, directing the NNPCL to sell crude oil in naira to the refinery.

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    In another twist, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) would raise concerns about the refinery’s petroleum having excessive sulphur content, opening another chapter for debate. After much back and forth, the National Assembly stepped in to calm the waters.

    Despite these hurdles, the refinery began test runs for petrol production on August 23. On September 3, over a year after its launch in May 2023, it officially rolled out petrol to mark the end of a chapter and the beginning of a new one.

    At the press conference to mark the official rollout, Dangote declared, “It’s a celebration day for Nigerians,” while assuring citizens that they will “now have good petrol, and the engines of your vehicles will last longer. You will not have engine issues, which many of us were facing. It won’t happen at all.”

    He added that the fuel quality will match that of any global standard and promised that the refinery would help revive industry and manufacturing. With real import substitution, Nigeria would save foreign exchange, earn foreign exchange, stabilize the naira, and potentially bring down inflation and the cost of living.

    Yet, questions linger: Will the refinery’s production bring relief from fuel scarcity? How soon will it impact the forex market? Will the naira stabilize or even appreciate against the dollar? And the price?

    While citizens await the Federal Executive Council (FEC) to establish a new pricing structure for petrol produced at the refinery, Nigerians are still asking: What’s next?

    •Rabi Ummi Umar,rabiumar058@gmail.com.