The Independent Petroleum Marketers Association of Nigeria has expressed that Dangote Petroleum Refinery ought to offer Premium Motor Spirit (petrol) at a price lower than the current N825 per litre being charged by the Lekki-based facility.
According to IPMAN’s Publicity Secretary, Chinedu Udadike, during a chat with our reporter, the refinery has all the necessary advantages to provide petrol at a rate lower than the current ex-depot price.
Udadike was responding to remarks made by Aliko Dangote, President of the Dangote Group, who said that the refinery had helped reduce fuel prices to the extent that Nigerians now pay only about 55 percent of what citizens in other West African countries pay.
Recently, Dangote also informed ECOWAS officials and President Bola Tinubu that the Federal Government’s naira-for-crude initiative has contributed positively to the pricing of refined fuel products.
While Udadike acknowledged that petrol is currently more affordable in Nigeria compared to other West African nations, he argued that the price should be even lower locally, suggesting a rate around N750.
He noted that many of the countries referenced in Dangote’s comparison neither produce crude oil nor have the ability to refine crude in their local currencies.
He stated that petrol in Nigeria should be considerably cheaper since the country produces crude oil and the president has agreed to supply Dangote crude in naira, eliminating the foreign exchange issues and related costs, which should also benefit Nigerians.
Udadike credited Dangote with resolving the issue of fuel scarcity, which had previously led to long queues at fuel stations. He urged the government to work on strengthening the naira so fuel prices can be more affordable.
He explained that Dangote has successfully addressed the availability of fuel. However, regarding pricing, he believes there is room for improvement. Once the government stabilizes the naira and improves its value, the price of petroleum products should drop further.
When asked whether he believed Dangote’s fuel was priced fairly, he responded that given the favorable conditions and facilities available to the refinery, the petrol price could be more affordable.
He added that he personally feels the price is still high and estimates petrol should sell for around N770 per litre. Based on what he has learned about refinery production and depot landing costs, the price of petrol shouldn’t exceed N780 or N750, depending on the current dollar rate.
He further stated that if the Federal Government can maintain a stronger naira, petrol prices are likely to fall. The current exchange rate, he believes, is one of the main factors keeping prices elevated.
He predicted that if the naira strengthens to about N1,100 against the dollar, petrol could be sold at a price below N750 per litre.
Udadike noted that since the exchange rate is around N1,600 currently, if it drops to about N1,200, the pump price of petrol could go below N750.
While addressing ECOWAS leaders recently, Dangote pointed out that many Nigerians do not realize they are paying only 55 percent of what other West African countries pay for petrol.
He shared that his refinery has helped lower fuel prices, currently selling petrol in the range of N815 to N820 per litre.
During a tour of the 650,000 barrels-per-day refinery facility by the President of the ECOWAS Commission, Dr Omar Touray, Dangote highlighted that Africa stands to benefit from increased intra-continental trade, which will help reduce costs of refined goods and inputs across sectors.
He recalled that when diesel production started last year, the refinery managed to cut its price from N1,700 to N1,100 almost immediately. Today, the price has dropped even further, positively impacting sectors such as mining and agriculture.
He added that Nigerians have been enjoying the benefits of local refining, as petrol prices have fallen compared to those in neighboring countries.
He explained that in neighboring countries, petrol averages about $1 per litre, or N1,600, while his refinery sells for between N815 and N820. Most Nigerians, he said, may not realize they are paying significantly less than others in the region.
During President Tinubu’s recent visit to the refinery, Dangote again noted that the naira-for-crude deal has helped him maintain consistent reductions in petrol prices. However, a report by S&P Global pointed out that fuel prices from the refinery remain high relative to the recent drop in crude prices.
As at press time, the refinery’s spokesperson, Tony Chiejina, had not responded to the statements made by IPMAN.