Fuel price hike: IPMAN blasts NNPCL, says petrol less than N900/litre from Dangote Refinery

The Independent Marketers Association of Nigeria (IPMAN) has strongly condemned the recent petrol price increase by the Nigerian National Petroleum Company Limited (NNPCL)

IPMAN alleged that NNPCL is seeking to sell fuel to its members at an inflated rate of over N1,000 per liter, despite purchasing it from Dangote Refinery for less than N900.

The National President of IPMAN, Alhaji Abubakar Garima disclosed in an interview on Friday.

Alhaji Garima said that marketers are struggling to obtain petroleum products from NNPCL after the price hike, despite fulfilling down payment obligations.

Garima revealed NNPCL buys from Dangote Refinery at below N900 per liter, yet sells to marketers at an inflated price of N1,010 to N1,050.

The IPMAN President urged the NNPCL to adopt a fair pricing strategy, selling to marketers at the same rate they purchased from Dangote Refinery, to encourage competition.

Alternatively, IPMAN requested an alignment of petroleum product prices with Dangote’s rate or refund marketers’ payments if it cannot meet the demand given.

He said: “We have an existing debt with NNPCL which purchased products from Dangote Refinery at less than N900, and now demands we buy the same product at higher rates of N1,110 in Lagos, N1,045 in Calabar, N1,040 in Port Harcourt, and N1,050 in Warri.”

“If NNPCL matches Dangote’s selling rate, we may offer competitive prices, such as N1,020 or N1,010, fostering market competition,” Garima stated.

In addition, according to the IPMAN President, the recent price adjustment indicates complete deregulation of Nigeria’s petroleum sector.

He noted that deregulation will bring competition to the sector, ending NNPCL’s exclusive hold on petrol imports and Dangote refinery off-take.

He added that with deregulation, marketers now have the option to source petrol directly from Dangote Refinery or through imports.

“Now that the sector is fully deregulated, we independent marketers can fully participate in the downstream sector, unlike before when NNPC was the only one supplying the product.

“At the same time, NNPCL holds the exclusive offtake agreement with Dangote Refinery, while independent marketers are now permitted to import petroleum products directly.”

“Previously, challenges arose because only NNPC was permitted to import petroleum products, and they were the sole buyer from Dangote Refinery, but with the new arrangement where Dangote purchases in naira and sells in naira, they will supply products directly to us, bypassing NNPC,” he added.

NNPCL has announced a petrol price hike, with prices reaching N998 in Lagos and N1,030 in Abuja.

This has marked the second price hike by NNPCL in less than two months.

The latest price hike follows revelations of NNPC’s impending withdrawal from the Dangote Refinery purchase deal, fueling concerns over potential future price increase.

The gradual removal of petrol subsidies has led to a steady increase in fuel prices, as the government struggles with effective regulation of petrol distribution.

About Dangote Refinery

The Dangote Refinery is a mega petroleum refinery located in Lekki, Lagos State, Nigeria. It’s owned by the Dangote Group, a conglomerate founded by Aliko Dangote, Africa’s richest man. Its products are petrol, diesel, jet fuel, kerosene, and fertilizer.

Capacity

The refinery has the capacity of 65,000 barrels per day (BPD), with its investment of $15 billion.

Objectives

Dangote Refinery aims to reduce Nigeria’s dependence on imported petroleum products, and meet local demand for petroleum products

Also, it aims to export petroleum products to neighboring countries, create employment opportunities and boost Nigeria’s economy.

Technology and Partnerships

The refinery was built in partnership with international companies like Honeywell, UOP and Siemens.

It utilizes cutting-edge technology for efficient refining and environmental sustainability.

Impacts

The Aliko Group owned refinery faces challenges like funding and financing, construction delays, environmental concerns, competition from existing refineries and regulatory challenges.

Recent Developments

Dangote Refinery was inaugurated on May 22, 2023, and the Nigerian National Petroleum Corporation (NNPC) has signed an agreement to buy 20% stake in the refinery. It also plans to list the refinery on Nigerian Stock Exchange (NSE).

More on NNPC

The Nigerian National Petroleum Corporation (NNPC) is Nigeria’s state-owned oil and gas corporation, responsible for managing the country’s petroleum resources.

It was established in 1977, merged with Nigerian National Oil Corporation (NNOC) in 1988 and reorganized into seven subsidiaries in 1990.

Key Functions

Its functions include exploration and production of oil and gas, refining and petrochemicals, marketing and distribution of petroleum products and regulation of the oil and gas industry.

Subsidiaries

NNPC subsidiaries includes Nigerian Petroleum Development Company (NPDC), Nigerian Gas Company (NGC), Petroleum Products Marketing Company (PPMC), Nigerian Pipelines and Storage Company (NPSC), National Engineering and Technical Company (NETCO) and so on.

Objectives

NNPC was established to increase oil and gas production and improve refining.

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