Fresh findings have revealed why oil marketers are reluctant to patronise Dangote Petroleum Refinery since it commenced processing premium motor spirit (PMS) in September.
Aliko Dangote, founder and president/chief executive of the Dangote Group, on Tuesday, held a meeting with President Bola Tinubu in Abuja and told reporters that he had over 500 million litres of petrol in tanks at his mammoth refinery but marketers were not patronising his facility.
“So, I am expecting that the Nigerian National Petroleum Company Limited (NNPC) and the marketers should stop importing; they should come and collect what they need,” Dangote said Tuesday.
However, some marketers who spoke with BusinessDay said the price of Dangote petrol may have constituted a serious hindrance to patronage.
They said the refinery’s pricing is often higher than that of imported alternatives.
“The pricing from Dangote has made it challenging for us, especially when we can source cheaper alternatives from abroad,” a senior oil executive in the downstream business, who preferred anonymity, said.
“The estimate showed Dangote petrol is about N977 per litre, N7 higher than imported petrol price of N970/litre. The fair market price following the full deregulation of the downstream oil sector by the government allowed room for PMS imports,” he added.
Other sources said the insufficient supply from the Lekki-based plant means that marketers with approved import licenses are free to import premium motor spirit (PMS).
They alleged that the plant produces about 10 million litres of petrol daily as against the 25 million litres that it had earlier promised to churn out.
Read also: NNPC quits monopoly role in Dangote petrol
BusinessDay findings showed that four vessels carrying imported PMS, popularly called petrol, arrived at seaports situated along the nation’s borders between Friday, October 18, and Sunday, October 20,
Most experts however said Nigerians should be concerned about the importation of substandard petroleum products into the country.
IPMAN says can’t load Dangote petrol
On Channels Television’s Sunrise Daily programme on Wednesday, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said the association, with over 20,000 members in Nigeria, has N40 billion upfront payment with the Nigerian National Petroleum Company (NNPC) Limited and still can’t load the premium product from the private refinery.
Abubakar Garima, president of IPMAN, expressed surprise that the owner of the $20 billion refinery, Aliko Dangote, said marketers were boycotting his refinery to buy imported petrol.
He said rather than get Dangote petrol through the NNPC, the private refinery should register independent petroleum marketers directly for smooth loading of the product.
“If he (Dangote) can sell the product to us directly, we can buy the product, because we have to pay before we pick. Presently, we have N40 billion under the NNPCL custody but we cannot source the product.
“Recently, there are some of my marketers that NNPC sent to load in Dangote refinery and those marketers stayed with their trucks for four days and they could not load,” he said.
The IPMAN president also urged Dangote refinery to check the price of its commodity if marketers importing petrol are boycotting his product.
“Since he (Dangote) says marketers are not buying his product, he should check his price properly. Is it higher than what they are obtaining from outside or is it the same rate? Then, if marketers buy this product through him, how long will it take for it to reach their depots? That one too is a factor,” Garima stated.
In an earlier interview, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said that all imported PMS would be subjected to at least three major tests by the agency before being allowed for sale across the country.
Its spokesperson, George Ene-Ita, said marketers with approved import licenses were free to import PMS, but stressed that the products must be subjected to three major tests by the agency.
“The products must be subjected to our testing protocols at the ports. The products must conform to stipulated standards before we authorise them to move the fuels to their terminals.
“Also, before the smaller vessels bring it further inland to Nigeria, our people will fly to the place to see the product and carry out some tests to ensure the right specification is upheld.
“Tests are also done at the products’ origins. And when the products come in, before they are released to the market, further tests would be conducted to ensure that they meet the specifications,” he stated.
Read also: Marketers face pricing hurdles over direct Dangote petrol purchase
Control of downstream market
In recent months, the Dangote Group has been at loggerheads with the NNPC, petroleum regulators and some private oil firms over the control of the petroleum downstream market.
In June 2024, Dangote Group accused some international oil companies of sabotaging the plant’s operations by either refusing to supply crude or offering oil at higher premiums compared to market prices.
It also clashed with the NMDPRA, which claimed diesel from the refiner had sulphur content levels above the allowed threshold. The regulator also accused Dangote of seeking to be a monopoly.
In refuting the allegation, Africa’s richest man took lawmakers visiting the refinery to a laboratory within the plant, where diesel from the refinery was tested alongside two different samples from imports.
The results showed the sample from the refinery’s diesel had much lower sulphur than the imported ones.
In July, the Federal Executive Council (FEC) directed NNPC Ltd to engage the Dangote refinery and other local refineries to resolve the dispute over the sale of crude oil to them.
The FEC, presided over by President Bola Tinubu, also directed that such crude oil sales to the refineries be made in naira and that the refineries located in Nigeria should also sell their refined products to the Nigerian market in naira.
In October, the Nigerian government said it had officially commenced the sale of crude oil and refined petroleum products in Naira. The sale in Naira took effect from 1 October, the government said at the time.
On October 7, NNPC ended its exclusive purchase agreement with Dangote Refinery, opening up the market for other marketers to buy petrol directly from the refinery.
The decision meant that the NNPC no longer acted as the sole off-taker, and marketers could now negotiate prices directly with Dangote Refinery.
On 11 October, the Nigerian government confirmed NNPC’s stance.
