Dangote fuel: Marketers fear high-priced petrol ahead of supply

As Premium Motor Spirit also known as petrol from the Dangote Petrochemical Refinery hits the local market in two to three weeks, petroleum marketers have expressed the fear that the product’s price may be higher than expected.

They spoke against the backdrop of the 650,000-capacity refinery’s failed attempt to get feedstock locally from the international oil companies.

Dangote Refinery has continued to import crude oil from the United States and other countries at a higher cost. This development has reportedly made its diesel and aviation fuel not very attractive to some local marketers due to price reasons.

The marketers, who spoke on Monday, raised concerns that the cost of importing crude oil would impact the cost of production, a development that may eventually hike the ex-depot price of the Dangote PMS.

The Chairman of the Dangote Group, Aliko Dangote, has said PMS from the refinery will hit the Nigerian market by the third week of July.

Marketers and Nigerians have been hopeful that the Dangote refinery will cut down the price of PMS which jumped from around N200/litre to over N600/litre after the removal of fuel subsidies by President Bola Tinubu on May 29, 2023.

However, there are fears among stakeholders that Dangote’s lack of access to local crude oil may dash Nigerians’ hope of getting cheaper PMS.

Speaking in an interview with our correspondent, the National Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, said the association was afraid that crude imports would jerk up the price of Dangote petrol.

According to Fashola, the refusal of IOCs to sell crude oil to Dangote will be a big challenge to the $20bn refinery, even as he acknowledged that the IOCs also have other business commitments.

“The non-supply of crude is a big challenge for Dangote. You know Dangote cried out too. The international oil companies too will have their reasons; you know they have their commitments too. It’s not like they will start feeding Dangote only. People should understand that. I think Dangote should consider that. I know this prompted Dangote to go outside the soil of Nigeria to seek crude oil. You know when he keeps bringing crude oil from the United States, that is another cost. That is another problem we are scared of because it will still boil down to the high cost of petrol, unlike where he can source the crude locally in Nigeria,” Fashola said.