Marketers are yet to access petrol lifted on Sunday by the Nigerian National Petroleum Company (NNPC) from Dangote Petroleum Refinery, BusinessDay has learnt.
Oil marketers under the aegis of the Independent Petroleum Marketers Association of Nigeria (IPMAN), on Tuesday, said unresolved pricing issues are among the major reasons why its members are yet to lift Dangote petrol from NNPC.
Abubakar Maigandi, national president of IPMAN, highlighted that despite the refinery’s capacity to produce petrol locally, marketers remain unable to access the product due to a lack of agreement on pricing, leaving the fuel supply chain in a state of uncertainty.
“We have not been supplied petrol from Dangote Refinery as we wait for the NNPC on pricing,” he said.
Mohammed Lawal, a petroleum dealer attached to one of the biggest downstream firms, said markets are yet to get the green light from NNPC for Dangote petrol three days after lifting product from the 650,000-barrels per day (bpd) refining capacity.
“We are still selling old stocks of petrol. There is still so much uncertainty about pricing or when we will lift Dangote petrol,” Lawal told BusinessDay.
NNPC, on Monday, September 16, released pricing details for petrol, also known as premium motor spirit (PMS), produced by the Dangote Petroleum Refinery.
The prices, ranging from N950 to N1,019 per litre depending on location, sparked reactions across the oil industry and the private sector.
The gantry price per ton at the refinery was quoted to be N736, which is equivalent to $0.55 per litre. At the official exchange rate of N1,637.59 to one dollar, the NNPC said the cost of one litre of petrol stands at N898.78.
For each litre of petrol, NNPC said apart from the landing cost from refineries, there are statutory and regulatory charges that must be paid by suppliers. Those charges include: NMDPRA fee, N8.99; inspection fee, N0.97; distribution cost (Lagos) N15.00; and profit margin, N26.48. They must be added to the product’s landing cost to achieve the price range of N950 to N1, 019 per litre.
Oil marketers expressed concerns that these high prices would justify continued importation of petrol into Nigeria, despite efforts to promote local refining.
A major marketer revealed that vessels of imported petrol were expected to start arriving in Nigeria on Tuesday, September 17.
“This is because for whatever is going to come out of Dangote refinery, it is either there will not be enough transparency in the allocation of the product or there will be other issues.
“Also, some big players may not get enough quantity from the plant and they will have to complete this with imported products. Like I told you, all things being equal, from September 17 (yesterday), PMS vessels by marketers, not NNPC, should start coming into the country,” he said.
Femi Falana, Senior Advocate of Nigeria, said it is ‘illegal for the state oil company, NNPC, to determine prices of petrol after deregulation.
Falana, on Tuesday, said the action of the NNPC violates Section 205 of the Petroleum Industry Act (PIA).
According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.
“The action of the NNPC is a violent contravention of Section 205 of the PIA, which stipulates that the prices of petroleum products shall be determined by market forces,” Falana said.
Product sold at subsidised rate – NNPC
Monday, Adedapo Segun, executive vice-president, downstream at NNPC, said marketers cannot purchase petrol directly from the refinery because the product is still sold at a subsidised rate.
“That is the same thing happening with Dangote. I said earlier that Dangote is a company and it will sell at market price,” he said.
“The market value of PMS is still higher than the N766 or N765 or N799 that NNPC is selling.
“So, there is no way the marketers would bring it in. There’s no way the marketers would also buy from Dangote.
“The situation has not changed there. So, NNPC’s off-taking is only because the others would not buy at the price Dangote will be willing to sell, which is reasonable.
“As soon as the price allows for it, you will see the marketers go to Dangote and buy.
“So, instead of saying NNPC is the only off-taker, let’s put it this way: NNPC is the only entity that is willing to off-take because NNPC has a role under the law to be the energy provider of the resort.”
This, Segun said, is not out of a desire to exclude other marketers “and you see that play out in the fact that NNPC is going to supply crude to Dangote and collect naira.”
Segun said as soon as petrol prices are cost-reflective, every other marketer can buy the product.
(BusinessDay)
