The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that the Nigerian National Petroleum Company Limited (NNPCL) has not overstepped its authority in setting petrol prices within the country.

Farouk Ahmed, the Chief Executive Officer of NMDPRA, addressed the recent suggestions that the NNPCL had assumed control over a significant responsibility of the agency.

He said, “We try to restrain ourselves from needless controversy.

“But to put the record straight, the recent transaction between NNPCL and Dangote Refinery is strictly based on a willing buyer and a willing seller.

“But I know you will ask me that the supply is not sufficient in Nigeria, hence the high price. Of course, things would work fine when we have more players in the sector.

“But in a situation whereby some Nigerians expect us to regulate the price, it then means that the sector has not been deregulated; and it means we would continue to have problems.”

BREAKING:The NNPCL has confirmed that they buy petrol from the Dangote Refinery at a rate of N898 per litter, says “it will be grateful for any discount from the Dangote Refinery.”

In statement released by Olufemi Soneye
Chief Corporate Communications Officer.

The statement reads: “NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery, Based on September 2024 Pricing

“The NNPC Ltd has released estimated prices of Premium Motor Spirit (PMS), also known as Petrol (obtained from the Dangote Refinery) in its retail stations across the country.

“The NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by Government, but negotiated directly between parties on an arms length.

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

“NNPC Ltd 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% to the general public.

“Attached to this statement are the estimated pump prices of PMS (obtained from the Dangote Refinery) across NNPC Retail Stations in the country, based on September 2024 pricing.”

“Petroleum product marketers in Nigeria have written to President Bola Tinubu to complain that the refinery local prices which have dropped from N1,200 to N1,000 and now N900 per litre are impacting their businesses negatively.”

- Devakumar Edwin, the Vice President of Dangote Industries Limited,

The Dangote Refinery is facing challenges in selling approximately 29 tankers of diesel daily, primarily due to reduced demand from oil marketers.

The Vice President of Dangote Industries remarked that oil marketers currently acquire just 3% of the products from Dangote Refinery, as they are opting out due to the lower pricing.

He said, “As a result of this poor local patronage, the refinery exports most of its diesel and aviation fuel.”

Edwin previously stated that if the Nigerian National Petroleum Company Limited and other oil distributors in the country do not support Dangote Refinery, its products would be marketed for export instead.

“We have been exporting aviation fuel, we have been producing kerosene, we have been producing diesel, but yesterday, we started the production of PMS. So, that was the last stage. The only thing now left out is petrochemicals.”

“Now that NNPC has said they are not the sole off-taker of Dangote petrol, it then means that the price of the product would determine where we are going to buy it. If NNPC imports the product and its price is cheaper than that of Dangote, we will buy from NNPC.” - The National Publicity Secretary of IPMAN, Ukadike Chinedu, stated that if NNPC offers a product at a lower price than Dangote's, they will choose to purchase from NNPC. He added that while marketers are open to buying from Dangote, NNPC’s announcement indicates that dealers have the flexibility to obtain their products from any source that is more cost-effective.

He added, “From what is happening now, it means that the Petroleum Industry Act is being implemented, the removal of subsidies has come to stay and the price of petrol is to be determined by the economics of demand and supply.

“If Dangote’s price is cheaper than that of NNPC, then we will buy from Dangote. So, right now, competition will set in. Remember that diesel price rose as high as N1,600/litre and Dangote came in with his own at N1,200/litre, and the importers reduced their price to N1,100/litre.

“It further dropped to about N950 and now revolves between N950 and N1,100 for both the imported ones and the ones produced locally. By the time competition sets in, the product will sell cheaper”

“Our National President, Alhaji Abubakar Maigandi, has commenced discussions with some investors who are now in the process of securing funds going by the current trend in the business.

“So, we are talking with some foreign partners because you need to understand that independent marketers are the highest buyers of diesel from Dangote refinery because we control about 80 per cent of the filling stations nationwide. So, if Dangote PMS is cheaper we will buy it, but if importation is cheaper, we will go for it.”

Regarding the pricing of Dangote petrol, Mustapha Zarma, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, 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.”

“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 Independent Petroleum Marketers Association of Nigeria announced on Saturday their willingness to purchase PMS from Dangote at any price, regardless of whether the NNPC decides to make a purchase or not.

The National President of the association, Abubakar Maigandi, expressed that the independent marketers are prepared to patronize Dangote

He said, “Whatever the case, if Dangote starts selling his product, we are going to patronise him; if at all he wants to do business with us.

“We are ready to buy at any price because the NNPC is saying that they don’t want to involve themselves in fixing prices. So, at any price that he wants to sell, we are ready to buy and discharge and sell at a good price.”

NNPC YET TO LIFT OUR PETROL - Dangote Refinery

In a statement released by Anthony Chiejina Dangote Group Chief Branding and Communications Officer, Dangote says they are yet to finalize contract with NNPC.

The statement reads: “Our attention has been drawn to a headline "NNPC lifts Dangote Petrol, sells at N897 per litre" published in the BusinessDay Newspapers of Wednesday, 4 September 2024.

“We would like to state that NNPC has not commenced lifting of refined Premium Motor Spirit (PMS), commonly known as petrol, from our Dangote Petroleum Refinery.

“Therefore, the issue of fixing the price of petrol lifted from our refinery does not arise, as we are yet to finalize our contract with NNPC.

“The PMS market is strictly regulated, which is known to all oil marketers and stakeholders in the sector, hence we can not determine, fix, or influence the product price, which falls under the purview of relevant government authorities.

“We urge the public to disregard the headline as it is misleading and does not represent the true position in this matter.
We are guaranteeing Nigerians of exceptionally”

The Dangote refinery is set to deliver its inaugural shipment of petrol to the local market today.

Today, Aliko Dangote, the CEO of the refinery, is at the plant to personally oversee the momentous reveal of the petroleum products.

The Nigerian National Petroleum Corporation (NNPC) Limited will be the first buyer of Dangote's products, and NNPC representatives are currently present at the Lagos petrochemical facility to facilitate the delivery.

"If NNPC imports PMS and sells to marketers at perhaps N600 or below, there's no way that smuggling can stop.
When smugglers are taking the products outside the country, even if you put all the policemen on the road, they are Nigerians; you and I know the answer (response)," - The Minister of Petroleum, Lokpobiri, elaborated why fuel smuggling, pipeline vandalism cannot stop.

The Dangote Petroleum Refinery is preparing to commence the sale of petrol, as per The Punch.

According to industry insiders who spoke with the Punch, the product is expected to launch in the market soon.

According to source who spoke to Punch, the government and the Dangote Group are currently collaborating to establish the details for the distribution of the product.

According to the source, only the Nigerian National Petroleum Company Limited would be permitted to sell Dangote fuel.