Fuel Import Deal: Marketers Seek Cheaper Petrol Amid Dangote Price Volatility

Nigerian oil marketers have reportedly begun negotiations with international traders to import cheaper Premium Motor Spirit (PMS) into the country, citing price volatility from the Dangote Petroleum Refinery as a major concern.

The marketers insist that petrol from the refinery should be priced below N825 per liter to remain competitive.

The Deal

According to Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), the deal with foreign traders could see petrol priced around N550 per liter, with transactions in naira instead of dollars. This, he says, would help reduce costs and make the product more affordable for Nigerians.

Marketers’ Grievances

Gillis-Harry expressed frustration with the current pricing system, stating that frequent price fluctuations have led to significant losses for marketers. He emphasized the need for stable prices to monitor investment risks and ensure predictability in the market.

Dangote’s Response

The Dangote refinery has denied allegations of monopoly, saying its plan to begin direct fuel supply to filling stations would result in lower fuel prices and create more jobs. Aliko Dangote, Chairman of the Dangote Group, also highlighted the refinery’s contribution to reducing fuel prices in Nigeria compared to neighboring countries.

Industry Perspectives

The Independent Petroleum Marketers Association of Nigeria (IPMAN) Publicity Secretary, Chinedu Ukadike, noted that some importers are already selling PMS below Dangote’s prices. He attributed this to the government’s easing of the naira-dollar exchange rate, which should have a positive impact on petroleum product pricing.

Challenges Ahead

Despite the potential benefits of the import deal, concerns remain about the sustainability of the government’s agreement with industry stakeholders to prioritize locally refined products. The non-functionality of government refineries has created a monopoly for Dangote, allowing the refinery to dictate prices.

Key Points

• Fuel Price: Marketers seek petrol prices below N825 per liter from Dangote refinery
• Import Deal: A Potential deal with foreign traders could see petrol priced around N550 per liter
• Price Volatility: Marketers complain of frequent price fluctuations affecting their business
• Dangote’s Plan: Direct fuel supply to filling stations expected to lower prices and create jobs
• Industry Concerns: Non-functionality of government refineries creates a monopoly for Dangote, dictating prices