Oil marketers are preparing to initiate the importation of Premium Motor Spirit (PMS), commonly referred to as petrol, following the clarification from the Nigerian National Petroleum Company Limited (NNPC) that it would only fully offtake the product from the Dangote Petroleum Refinery if the prevailing market prices exceed the pump prices within Nigeria.
Furthermore, NNPC has articulated that Dangote is permitted to engage in direct sales to any marketer on the basis of willing buyer and willing seller.
This stance, however, stands in stark contrast to the assertions made by the President of Dangote Group, Alhaji Aliko Dangote, last week. The proprietor of the $20 billion refinery had indicated that the refinery was awaiting NNPC’s actions, asserting that the national oil company would serve as the sole off-taker of its petrol in the domestic market.
In response to the deceleration in negotiations between Dangote and NNPC, oil marketers expressed that they would procure the product from whichever source offered it at a lower price, which could include importation.
Commenting on the price of Dangote petrol, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, said, “We have not contacted Dangote for now, but we may contact the refinery’s sales department this week to find out the price.
“If the price is competitive enough for one to buy and get his return on investment and the required margin, then we wouldn’t mind purchasing directly from him to complement what NNPC is bringing in or what NNPC would buy from Dangote.”
Zarma affirmed that since the Federal Government and NNPC had indicated that the Dangote refinery would market its product at the prevailing market price, this signified that the government would refrain from intervening in the pricing of the commodity from the plant through subsidies.
In light of this, he observed that other dealers now possess the opportunity to procure the product from any producer at a more favorable price, whether sourced locally or internationally.
He remarked that certain oil marketers are currently importing diesel, while others are acquiring the product from Dangote, suggesting that a parallel scenario would emerge in the procurement of petrol, given NNPC’s recent position concerning Dangote petrol.
“I believe that we are going to analyse the price of Dangote petrol and see the advantages of buying from Dangote viz-a-viz importation. Whichever we feel is cheaper will automatically attract everybody, especially if importation is cheaper.
“That will bring about competition and I don’t think the government will allow price monopoly. They would want a competitive market where the laws of demand and supply would determine the local price of refined petroleum products, just like diesel is right now.
“And with that, there is going to be some kind of equilibrium in the pricing and there is going to be guaranteed sustainability of supply,” the IPMAN official stated.
