Amidst Dangote Refinery Uncertainty, Petrol Prices Soar as Landing Costs Rise; Marketers Fear Further Increases

Nigeria’s fuel market faces growing uncertainties as oil marketers express concerns over the delayed announcement of the price of Premium Motor Spirit (PMS), commonly known as petrol, produced by the Dangote Petroleum Refinery. The landing cost of imported PMS has now reaced approximately N1,120 per litre, sparking fears that locally produced petrol from the Dangote refinery may also carry a high price tag.

In July, the Major Energies Marketers Association of Nigeria reported that the landing cost of PMS stood at N1,117 per litre, placing a significant burden on both marketers and consumers. As pump prices rose from N600–N700 per litre in July to N855–N897 per litre last week, some independent dealers have already increased prices beyond N1,000 per litre. With the Dangote refinery yet to announce its pricing, marketers are concerned that higher costs could lead to the increased importation of petrol, as the market has now been opened for competition.

Oil Marketers Prepare for Petrol Imports Amid Uncertainty

The delay in releasing Dangote’s petrol price has prompted Nigerian oil marketers to explore alternatives, with many engaging in discussions with foreign partners to assess the feasibility of importing PMS. Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that marketers are awaiting data on the landing cost of imported petrol. He noted that a higher price from the Dangote refinery would likely result in large-scale petrol importation, as marketers seek more affordable options.

Maigandi emphasized the importance of competition in an open market, stating that wherever independent marketers find a cheaper rate with good quality, they will source the product. “We are waiting for the refinery to release the price, but in the meantime, we are also discussing with our foreign partners,” he said. This shift toward potential imports could bring both availability and competition to Nigeria’s fuel market, ensuring that products remain in supply as various entities compete to sell their stock and generate profits.

Dangote Group Aims for Competitive Pricing Despite Market Challenges

An official from the Dangote Group revealed that the President of the group, Alhaji Aliko Dangote, is committed to offering competitive pricing for PMS in Nigeria, despite the current market challenges. Dangote has a proven track record of reducing diesel prices in the past, lowering costs from N1,700 per litre to N950 before they stabilized between N1,100 and N1,200. The same official expressed confidence that Dangote would do the same with PMS, even if the Nigerian National Petroleum Company Limited (NNPC) does not serve as an off-taker.

Described as a “nationalistic man” who loves his country, Dangote is reportedly ready to make sacrifices for the masses by offering more affordable fuel prices. The official stressed that Dangote’s refinery would sell PMS locally, regardless of the NNPC’s position. With Dangote’s efforts, there is hope that petrol prices can be stabilized to ease the pressure on consumers while fostering a competitive environment within Nigeria’s fuel market.

Rising Petrol Prices Cause Severe Hardship in Nigeria

The unrelenting rise in petrol prices across Nigeria has left citizens grappling with severe economic hardships. The increase in fuel costs has created a ripple effect on the prices of essential commodities, leading to widespread frustration and despair. The Nigerian National Petroleum Company Limited (NNPCL) recently declared that market forces would now determine petrol prices, citing the deregulation of the petroleum sector. This shift, while necessary for long-term sustainability, has resulted in a continuous hike in petrol prices, leaving many Nigerians burdened by the soaring costs.

With the cost of transportation and goods increasing alongside fuel prices, everyday Nigerians are struggling to cope with the situation. Businesses are finding it difficult to maintain profitability without passing on costs to consumers, leading to rising inflation and a shrinking purchasing power for the average citizen. The hopes that deregulation would stabilize the market seem to have dissipated, leaving the public questioning how long the economic strain will last.

Hopes for Dangote Refinery to Lower Prices Diminish

When the Dangote Refinery was commissioned, many Nigerians believed it would offer a solution to the escalating fuel prices. It was expected that the refinery’s local production would reduce the need for expensive fuel imports, thereby driving down costs and offering relief to the beleaguered public. However, recent developments have dashed these hopes. Despite the refinery’s operational status, petrol prices have continued to climb, leading many to fear that relief may not be coming anytime soon.

The economic quagmire brought on by skyrocketing fuel prices has plunged a majority of Nigerians into financial distress. Many are calling for immediate action from the government to mitigate the impact and provide relief. The expectation that the Dangote Refinery would stabilize the market has not materialized, leaving people with little hope for respite in the near future. As the situation grows more dire, the need for intervention becomes increasingly urgent to prevent further economic damage.