Dangote refinery snubs local oil marketers

The Dangote Refinery, with a capacity of 650,000 barrels per day, has continued to withhold direct sales of its Premium Motor Spirit (PMS) to independent oil marketers, despite increasing calls from industry stakeholders.

Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), and Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association (PETROAN), expressed their frustrations over the situation in separate interviews.

This comes as reports on Monday revealed that the Nigerian National Petroleum Company Limited (NNPCL) has relinquished its role as the sole off-taker of fuel from Dangote Refinery.

This decision has left oil marketers uncertain about future fuel supplies and pricing mechanisms.

Maigandi confirmed that repeated attempts by IPMAN to meet with Dangote Refinery’s management for direct purchase discussions have yielded no response.

He stressed the importance of direct sales, as it would lower the current high fuel prices, which range between N950 and N1,200 per liter in different parts of the country.

“We haven’t received any feedback or set up a meeting with Dangote Refinery regarding direct sales of their petrol. Until we can buy it directly, we can’t discuss potential pricing,” Maigandi said.

He further explained that purchasing fuel directly from Dangote Refinery would help reduce pump prices across Nigeria. “There would be a small reduction in price if Dangote sells petrol directly to us,” he added.

Regarding the NNPCL’s previous pricing, Maigandi revealed that the state-owned corporation has been selling petrol to marketers at between N840 and N870 per liter, depending on location, and marketers, in turn, are selling it at around N950 per liter in Abuja.

Commenting on the NNPCL’s withdrawal as the sole off-taker, Maigandi said, “We are waiting for clarification from Dangote Refinery on whether we can start lifting petrol directly.”

READ ALSO: NNPC steps down as middleman in Dangote refinery petrol purchase

Gillis-Harry echoed similar frustrations, confirming that PETROAN has also been unsuccessful in engaging Dangote Refinery for direct petrol lifting. “We have tried to open business discussions with Dangote Refinery, but they have not given us the green light,” he said.

Attempts to contact the Dangote Group spokesperson, Anthony Chiejina, for comments yielded no new information, as he simply stated, “I am not aware.”

On September 15, the Dangote Refinery began its inaugural petrol distribution, with the NNPCL as the sole buyer. Following this, a fuel price increase was implemented across NNPCL’s retail outlets, raising prices to between N950 and N1,100 per liter.

The NNPCL reported purchasing petrol from Dangote at N898 per liter, though this price was disputed by Dangote Refinery.

There has also been confusion surrounding the fuel pricing framework, with Dangote Refinery hinting that its official petrol pump price would be set by the Presidential Implementation Committee under the Naira-for-Crude sales agreement.

Despite the anticipated supply of 24 million barrels under the Naira-for-Crude deal by October and November 2024, the price per liter of Dangote petrol remains unclear.

Last month, the House of Representatives urged Dangote Refinery to permit oil marketers to lift petrol directly, arguing that this move could help stabilize prices. Additionally, industry experts had anticipated that the Naira-for-Crude sales arrangement would lead to a reduction in the pump price of petrol, but such hopes have yet to materialize.