Oil marketers, under the umbrella of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), have rejected claims by the Dangote refinery suggesting that cheaper petrol sold by other marketers is substandard.

On November 3, the Dangote refinery stated that any oil marketer offering petrol below its price is likely importing inferior products.

The refinery emphasized that its prices are aligned with international benchmarks and the rates at which the Nigerian National Petroleum Company (NNPC) Limited sells to local marketers after deregulation.

In response, DAPPMAN’s executive secretary, Olufemi Adewole, issued a statement on Tuesday, asserting that none of the association’s members are involved in the importation of low-quality products into Nigeria.

“We have said this for the umpteenth time, and it bears repeating, those in the downstream sector business of petroleum products trade are patriotic Nigerians who will not shortchange Nigerian citizens for filthy lucre,” Adewole said.

“Our members are in this business to add value to the businesses of their fellow Nigerians and not to defraud them.

“Prices of products in the international market are dynamic as they are dictated by prevailing circumstances at every given situation. We calculate our landing costs based on the dynamics of market forces, and the templates are always in the public domain.

“To claim that if the landing cost of imported product happens to be lower than that of the refinery indicates importation of low quality product is not only preposterous, but also fallacious. In any case, the management of the refinery has, until now, kept its cost and prices close to its chest and put it away from public scrutiny.”

Adewole said the refinery’s comment is targeted at projecting DAPPMAN’s members negatively before the public.

He also said such claims cannot help the company’s desire to have oil marketers patronise its products.

“What will ensure such patronage is transparency, fairplay, and readiness to compete with others, including foreign refineries, on an even keel and on a level playing field,” he added.

The DAPPMAN executive secretary said the company’s claim that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) does not have a modern laboratory to test imported fuel is false.

“A regulator must have access to modern, state of the art laboratory at every point in time, whether owned by it or others. Such laboratories must be of world standard,” he said.

“The regulator, and indeed, the marketers, have access to such world-class laboratories, which include: SGS, Inspectorate, and Interterk, among others.

“If fuel marketers were bringing in off-spec fuel, this wouldn’t have been difficult to detect. How many vehicles in the last one year have reported engine problems resulting from bad fuel? Where are the reports about environmental pollution occasioned by the usage of low quality fuel?

“It is a false statement to claim that any product brought in with a landing price lower than the price offered by the Dangote Refinery is a substandard product.

“It is the management of the refinery that will need to tweak its template to reflect the crude for naira sales and other incentives which the federal government has graciously extended to the refinery.”

Adewole also said the members were surprised to know that the refinery has a 500 million litres fuel reserve.

“We were surprised because we believe that if the Refinery has such huge stock, it is the marketers that should be put in the know first,” the executive secretary said.

“Secondly, it was even more surprising given that the news came about the time the refinery was working on rationing what each marketer could pick from the refinery. If they had such huge stock, how is it then that they are rationing what marketers could buy.”

Adewole said the association will continue to play by the rules and will not be tired of advocating for a level playing field, and a competitive and transparent sector.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has criticized the Dangote Petroleum Refinery for selling petrol at N990 per litre, describing the price as inconsiderate. The association pointed out that Dangote Refinery benefited from significant concessions in accessing foreign exchange during its construction.

PETROAN also argued that imported petrol is cheaper than Dangote’s N990 per litre. Major marketers recently revealed that the landing cost of imported petrol as of October 31, 2024, stood at N978 per litre.

On Sunday, Dangote Refinery accused PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) of planning to import substandard petroleum products into the country.

In response, PETROAN Publicity Secretary, Joseph Obele, issued a statement on Monday, stating, “PETROAN will sell far less than the current selling rate of PMS in Nigeria when granted an import licence by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.”

Obele said the association had successfully incorporated a strategic business unit called PETROL.

While noting that PETROAN’s drive was solution-centric and patriotic following the pricing instability and turbulence in the downstream sector, the association said the reformative agendas of President Bola Tinubu were seen as inimical to advocates and beneficiaries of the monopolistic market.

“Consumers get the best value for pricing when competition is at its peak, hence Competition should be encouraged. Contrarily to competition, such a market will be exploitative and strictly for profiteering.

“The publication by Dangote refinery that PETROAN will import substandard petroleum products is not coming as a surprise to stakeholders, because such is his usual gimmick for maintaining a monopoly. The publication was coming after PETROAN and IPMAN announced plans to sell far less than the current Selling rate of PMS in Nigeria.

“It is important to set the records straight that PETROAN has never compared the price of Dangote PMS with any, other than the fact that Dangote’s PMS price wasn’t known until this morning at the press release by Dangote Refinery,” Obele said.

He insisted that “PETROAN has concluded plans with its foreign refinery counterparts and financial partners to import the best quality of PMS and then sell far less than the present selling rate of PMS in Nigeria. We planned to enter the market before December 2024, pending the approval of our import permit license by the regulatory agency and access to foreign exchange from CBN at the official rate.”

The PETROAN spokesman maintained that before now, the Dangote refinery had refused to make public its selling rate of PMS until IPMAN and PETROAN announced their readiness to sell at prices less than the current prices.

“The rate of N990 as announced by Dangote refinery was inconsiderate based on the fact that Dangote refinery enjoyed massive concessions for accessing foreign exchange during the construction of the refinery.

“The core determinant for setting the price is a consideration of the cost of production, then adding a fair margin. But this wasn’t the case for the determinant of PMS price by Dangote refinery as they said ‘the parameter was comparison with the international selling rate at the global market’.

“A nation that gave you a yet-to-be-disclosed concession for foreign exchange which was highly criticised by financial experts, such a country pricing template shouldn’t have been templated by the selling rate at the international market but rather it should have been the cost of production plus fair margin,” Obele stressed.

He added that goods from Chinese markets are not as costly as goods from the American market because the cost of production differs.

“The allegations that PETROAN will import inferior products and also that an international company is trying to establish a PMS blending plant in Lagos are all strategies for Dangote refinery to push others out of the market to achieve a monopoly for exploitation.

“A few months ago, the CEO of Dangote refinery said the NNPC LTD was importing inferior petroleum products, that his own was far better than what NNPC LTD was selling to marketers. In another press conference, he said the refinery in Malta was just a blending plant and not a refinery. All the allegations are intending to close the doors against other operators to enjoy monopoly,” it was stated.

PETROAN commended Tinubu for his commitment towards the revamping of the nation-owned refineries, saying the ongoing rehabilitation project never suffered funding under Tinubu.

The association maintained its position by counselling that the Port Harcourt and Warri Refinery plants be immediately privatised and handed over to a reputable firm with the technical capability, managerial skills and financial strength in partnership with PETROAN and other critical stakeholders after completion.

This, Obele said, will enable the operators of the government-owned refineries to withstand aggressive ballistic competition that will be poised by the known beneficiaries of the monopolistic market.

The statement read further, “Antecedents of the beneficiaries of the monopolistic market has shown numerous suffocating business owners crashing out of other sectors for a sole operator in the past. Stakeholders’ concerns are a prayer that the process of privatisation should be transparent using Indorama Petrochemicals as a model as against the Maintenance Repairs and Operations contract.

“A balanced market should be an all-inclusive market where the market leader is enjoying his lead, while the market challenger is servicing a certain degree of the consumers and the market followers are still surviving in the market at an affordable price.

“Therefore, it is penitent that the Federal Government should discourage and dismantle any attempt at monopoly in the downstream sector given crashing the current selling rate of PMS. The only catalyst to trigger PMS price reduction is by ushering in competition and PETROAN will support the Federal Government in achieving intensive competition in the sector.”

• IPMAN reacts

In an interview (with The Punch), the National Secretary of IPMAN, Terlumun James, said the association did not have a blending plant in Lagos, calling on all stakeholders to unite and give Nigerians affordable energy.

James said there was nothing like building a depot to blend substandard fuel.

“There is nothing like that and I am not sure Dangote said all those words. I am always at the point of putting things correctly. You media people need to help us and help this country. If we come together, all these things will be solved. The common man is suffering a lot and that suffering has affected all of us. We all need to come together,” he said.

James added that IPMAN is still discussing with Dangote to commence lifting from the $20bn refinery.

“We are pursuing our import approval and we are discussing with Dangote,” the IPMAN secretary noted.

On Sunday, the spokesperson of the Dangote Group, Anthony Chiejina, said “An international trading company has recently hired a depot facility next to the Dangote refinery, with the objective of using it to blend substandard products that will be dumped into the market to compete with Dangote refinery’s higher quality production.”

When contacted, the NMDPRA refused to comment on the allegation.

Replying to a message form media house, the NMDPRA spokesperson, George Ene-Ita, said “No comment”.

Credit: The Punch

The Dangote Petroleum Refinery has stated that any oil marketer that sells petrol cheaper than the price it offers is importing substandard products.

The refinery, in a statement on Sunday, countered claims by some oil marketers that the cost of the product is higher than that of the imported petrol.

On November 1, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said petrol — also known as premium motor spirit (PMS) — from the refinery is more expensive than buying from other sources.

Yakubu Suleiman, national assistant secretary of IPMAN, speaking on Arise Television’s Morning Show programme, said the group’s members go for more affordable options at other depots across Nigeria than the high logistical costs associated with buying petrol from the Dangote refinery.

Responding to these claims, the refinery said its ex-depot price of petrol is N990 per litre for trucks and N960 per litre for ships.

The firm said that the prices are benchmarked against international prices and the amount the NNPC sold to local marketers.

“We had lately refrained from engaging in media fights but we are constrained to respond to the recent misinformation being circulated by IPMAN, PETROAN, and other associations,” the statement reads.

“Both organisations claim that they can import PMS at lower prices than what is being sold by the Dangote Refinery. We benchmark our prices against international prices and we believe our prices are competitive relative to the price of imports.

“If anyone claims they can land PMS at a price cheaper than what we are selling, then they are importing substandard products and conniving with international traders to dump low quality products into the country, without concern for the health of Nigerians or the longevity of their vehicles.

“Unfortunately, the regulator (NMDPRA) does not even have laboratory facilities which can be used to detect substandard products when imported into the country.”