Oil Marketers: It Makes No Sense for NNPC to Sell Locally Sourced Petrol Higher Than Imported Fuel

•National oil firm makes adjustment to breakdown of prices from Dangote refinery

Emmanuel Addeh in Abuja

Oil marketers yesterday argued that it wasn’t normal for the Nigerian National Petroleum Company Limited (NNPC) to sell petrol produced locally from the Dangote refinery to Nigerians at a pump price higher than imported fuel.

Coming under the umbrella of the Independent Petroleum Marketers Association of Nigeria (IPMAN), the oil marketers stressed that it then means that there was no cause for celebration if imported products are cheaper.

“If NNPC can sell Dangote product higher than the imported product, it doesn’t make sense. What is the celebration we’re having all this while then?, ” IPMAN’s National Welfare Officer, John Kekeocha, said on Channels Television.

Last Sunday, the NNPC began loading the first batch of petrol from the Dangote Refinery on Sunday, saying it got petrol at N898 per litre from the private refinery.

Early Monday, the national oil company released estimated prices of petrol obtained from the Dangote Refinery in its retail stations across the country, stressing that in line with the provisions of the Petroleum Industry Act (PIA), petrol prices are not set by government, but negotiated directly between parties.

“The NNPC can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1, 2024.

“The NNPC assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100 per cent to the general public,” it stated.

In the attached document, the NNPC stated that fuel from the Dangote refinery will sell for N950.22 per litre in Lagos; N960.22 in Oyo; N980.22 in Rivers; N992.22 in Abuja; N999.22 in in Kaduna; N999.22 in Kano; N999.22 in Sokoto and N1,019 in Borno, based on the September pricing template.

A breakdown indicated that the final price from the Dangote refinery was N898.78, according to the statement, while distribution within Lagos is N15 per litre, inspection fee is N0.97, NMDPRA fee is N8.99, with an expected margin of N26.48.

Before lifting petrol from the Dangote Refinery on Sunday, NNPC retail outlets in Lagos sold petrol for around N855  and N897 in Abuja.

But the Dangote Refinery denied selling petrol to the NNPC at N898. A spokesman for the refinery Anthony Chiejina in a statement on Sunday described the claim by the NNPC as “misleading and mischievous”.

“It should also be noted that we sold the products to NNPC in dollars with a lot of savings against what they are currently importing. With this action, there will be petrol in every local government area of the country regardless of their remote nature,” Chiejina said.

But the IPMAN executive explained that it was assumed that the product should be relatively cheaper because it is no longer being shipped in from abroad.

He argued that the fuel that NNPC is getting from Dangote cannot be costlier than the one imported, because it  has the advantage of the removal of a huge part of supply logistics.

“The products we are about to get from Dangote refinery cannot be costlier than the one imported because we have an advantage of supply logistics,” he said.

“If the Dangote refinery’s petrol price is N950 per litre without government intervention, it means under-recovery gradually comes to an end and maybe, Nigerians would get it cheaper,” he added.

Meanwhile, the NNPC has adjusted some portions of the nationwide petrol price document it released earlier on Monday.

Although the estimated prices for selling petrol around the country remained the same, however, the NNPC altered the analysis of the transaction it had with Dangote Refinery.

 THISDAY’s checks showed that the areas of differences between the first press statement and the second was that while for the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the fee was N8.99, the second statement showed N4.495.

Also, while the first statement had an inspection fee of N0.97, a margin of N26.48 and a distribution fee of  N15, the second statement did not indicate  inspection fee and margin. Also, the distribution and logistics fee was changed to N42.45.

Besides, the second statement had an additional Midstream and Gas Infrastructure Fund (MDGIF) of N4.495. The MDGIF is a government fund set up to invest in infrastructure projects that will improve transportation and processing as well as utilisation in the sector.