Imported petrol cheaper than Dangote’s N990/litre – Marketers

The Petroleum Products Retail Outlets Owners Association of Nigeria says the Dangote Petroleum Refinery is inconsiderate for selling petrol at N990/litre, stressing that the company enjoyed massive concessions while accessing foreign exchange during its construction.

PETROAN also insisted that imported petrol was cheaper than the N990/litre price of Dangote petrol. Major marketers recently revealed that the landing cost of imported petrol as of October 31, 2024, was N978/litre.

On Sunday, the Dangote refinery alleged that PETROAN and the Independent Petroleum Marketers Association of Nigeria were planning to import substandard petroleum products into the country.

Reacting to this in a statement on Monday, PETROAN Publicity Secretary, Joseph Obele, insisted, “PETROAN will sell far less than the current selling rate of PMS in Nigeria when granted an import licence by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.”

Obele said the association had successfully incorporated a strategic business unit called PETROL.

While noting that PETROAN’s drive was solution-centric and patriotic following the pricing instability and turbulence in the downstream sector, the association said the reformative agendas of President Bola Tinubu were seen as inimical to advocates and beneficiaries of the monopolistic market.

“Consumers get the best value for pricing when competition is at its peak, hence Competition should be encouraged. Contrarily to competition, such a market will be exploitative and strictly for profiteering.

“The publication by Dangote refinery that PETROAN will import substandard petroleum products is not coming as a surprise to stakeholders, because such is his usual gimmick for maintaining a monopoly. The publication was coming after PETROAN and IPMAN announced plans to sell far less than the current Selling rate of PMS in Nigeria.

“It is important to set the records straight that PETROAN has never compared the price of Dangote PMS with any, other than the fact that Dangote’s PMS price wasn’t known until this morning at the press release by Dangote Refinery,” Obele said.

He insisted that “PETROAN has concluded plans with its foreign refinery counterparts and financial partners to import the best quality of PMS and then sell far less than the present selling rate of PMS in Nigeria. We planned to enter the market before December 2024, pending the approval of our import permit license by the regulatory agency and access to foreign exchange from CBN at the official rate.”

The PETROAN spokesman maintained that before now, the Dangote refinery had refused to make public its selling rate of PMS until IPMAN and PETROAN announced their readiness to sell at prices less than the current prices.

“The rate of N990 as announced by Dangote refinery was inconsiderate based on the fact that Dangote refinery enjoyed massive concessions for accessing foreign exchange during the construction of the refinery.

“The core determinant for setting the price is a consideration of the cost of production, then adding a fair margin. But this wasn’t the case for the determinant of PMS price by Dangote refinery as they said ‘the parameter was comparison with the international selling rate at the global market’.

“A nation that gave you a yet-to-be-disclosed concession for foreign exchange which was highly criticised by financial experts, such a country pricing template shouldn’t have been templated by the selling rate at the international market but rather it should have been the cost of production plus fair margin,” Obele stressed.

He added that goods from Chinese markets are not as costly as goods from the American market because the cost of production differs.

“The allegations that PETROAN will import inferior products and also that an international company is trying to establish a PMS blending plant in Lagos are all strategies for Dangote refinery to push others out of the market to achieve a monopoly for exploitation.

“A few months ago, the CEO of Dangote refinery said the NNPC LTD was importing inferior petroleum products, that his own was far better than what NNPC LTD was selling to marketers. In another press conference, he said the refinery in Malta was just a blending plant and not a refinery. All the allegations are intending to close the doors against other operators to enjoy monopoly,” it was stated.

PETROAN commended Tinubu for his commitment towards the revamping of the nation-owned refineries, saying the ongoing rehabilitation project never suffered funding under Tinubu.

The association maintained its position by counselling that the Port Harcourt and Warri Refinery plants be immediately privatised and handed over to a reputable firm with the technical capability, managerial skills and financial strength in partnership with PETROAN and other critical stakeholders after completion.

This, Obele said, will enable the operators of the government-owned refineries to withstand aggressive ballistic competition that will be poised by the known beneficiaries of the monopolistic market.

The statement read further, “Antecedents of the beneficiaries of the monopolistic market has shown numerous suffocating business owners crashing out of other sectors for a sole operator in the past. Stakeholders’ concerns are a prayer that the process of privatisation should be transparent using Indorama Petrochemicals as a model as against the Maintenance Repairs and Operations contract.

“A balanced market should be an all-inclusive market where the market leader is enjoying his lead, while the market challenger is servicing a certain degree of the consumers and the market followers are still surviving in the market at an affordable price.

“Therefore, it is penitent that the Federal Government should discourage and dismantle any attempt at monopoly in the downstream sector given crashing the current selling rate of PMS. The only catalyst to trigger PMS price reduction is by ushering in competition and PETROAN will support the Federal Government in achieving intensive competition in the sector.”

IPMAN reacts

In an interview with The PUNCH, the National Secretary of IPMAN, Terlumun James, said the association did not have a blending plant in Lagos, calling on all stakeholders to unite and give Nigerians affordable energy.

James said there was nothing like building a depot to blend substandard fuel.

“There is nothing like that and I am not sure Dangote said all those words. I am always at the point of putting things correctly. You media people need to help us and help this country. If we come together, all these things will be solved. The common man is suffering a lot and that suffering has affected all of us. We all need to come together,” he said.

James added that IPMAN is still discussing with Dangote to commence lifting from the $20bn refinery.

“We are pursuing our import approval and we are discussing with Dangote,” the IPMAN secretary noted.

On Sunday, the spokesperson of the Dangote Group, Anthony Chiejina, said “An international trading company has recently hired a depot facility next to the Dangote refinery, with the objective of using it to blend substandard products that will be dumped into the market to compete with Dangote refinery’s higher quality production.”

When contacted, the NMDPRA refused to comment on the allegation.

Replying to a message by our correspondent, the NMDPRA spokesperson, George Ene-Ita, said “No comment”.