The Independent Petroleum Marketers Association of Nigeria (IPMAN) has said the Dangote Petroleum Refinery should sell Premium Motor Spirit (petrol) below the current N825 per litre price being sold by the Lekki-based plant.
IPMAN Publicity Secretary, Chinedu Udadike, in an interview with our correspondent, stated that the refinery had the necessary enabling factors to sell petrol below its current ex-depot price.
Ukadike was reacting to a comment by the President of the Dangote Group, Aliko Dangote, that the refinery contributed to the consistent drop in fuel prices to a level that Nigerians pay about 55 per cent of what other West African citizens pay for petrol.
Also recently, Dangote told ECOWAS officials and President Bola Tinubu that the naira-for-crude policy of the Federal Government had positively impacted the pricing of refined petroleum products.
Though Ukadike agreed that the current petrol price was cheaper than what other West African states paid, he said the product should be far cheaper in Nigeria, selling for about N750.
According to him, many of these West African countries do not produce crude oil, nor do they have refineries that process crude in local currencies.
“I agree that petrol is cheaper in Nigeria than in other West African countries. Notwithstanding, those African countries Dangote was comparing us with are not crude oil-producing countries.
“We’re a crude oil-producing state. PMS should be far lower as the President has also decided to give him crude in naira. So, most of the foreign exchange brouhaha and the exchange costs (are no more there), we should also enjoy it as Nigerians,” he said.
Ukadike said what Dangote had conquered for Nigerians was the issue of fuel scarcity, which used to cause queues at filling stations. He called on the Federal Government to strengthen the naira to make fuel more affordable.
“What I believe he (Dangote) has conquered for Nigerians is availability. On price, we’ll still get there. Once the government works very hard to ensure that the rate of naira to the dollar is reduced and the strength of our naira is stable, you’ll find out that the price will go down. This is another factor that determines the price of petroleum products,” he noted.
Asked if he meant that Dangote’s petrol was not cheap enough, he replied, “Well, I’m not saying it’s cheap enough in line with the facilities, amenities and the enabling environment that have been given to him.
“For me, I don’t feel it’s cheap. I think the petrol will go as low as around N770. That’s my own permutation. I’m not an expert in oil refining. But with what I have gathered — the refinery production costs and the landing at the depot cost — petrol should not be more than N780, N750, in line with the dollar rate.
“So, if the Federal Government can ensure that we continue to strengthen the naira, I believe that the price of petroleum products will go down further. What is keeping it up now is the exchange rate,” he posited.
The independent marketer predicted that if the naira appreciated to N1,100 against the dollar, petrol should be sold below N750 per litre.
“I don’t know how much the dollar will go down, so I cannot forecast. The dollar is around N1,600 now. So, if the dollar can come down to N1,200, I want to tell you that the price of PMS at the pumps will go below N750,” he added.
Speaking to ECOWAS leaders last week, Dangote said most Nigerians were unaware that they were paying 55 per cent of what other West African countries pay for petrol.
Dangote said his refinery had aided the reduction of fuel prices by selling petrol between N815 and N820 per litre.
The billionaire businessman stated this during a visit to the 650,000 barrels-per-day facility by the President of the Economic Community of West African States Commission, Dr Omar Touray, and his team.
Noting that Africa would benefit greatly by encouraging trade among its countries, Dangote explained how the refinery has helped Nigeria to bring down the cost of refined products and production costs across many sectors of the economy.
“Last year, when we began diesel production, we were able to reduce the price from N1,700 to N1,100 at a go, and as of today, the price has crashed further. This reduction has made a significant impact across various sectors. It has supported industries, benefited those of us in mining, and provided vital relief to the agricultural sector. The effect has been far-reaching,” he said.
He also emphasised that Nigerians were benefiting from local refining as the price of petrol had dropped significantly compared to neighbouring countries.
“In neighbouring countries, the average price of petrol is around $1 per litre, which is N1,600. But here at our refinery, we’re selling at between N815 and N820. Many Nigerians don’t realise that they are currently paying just 55 per cent of what others in the region are paying for petrol,” he noted.
During Tinubu’s visit to the refinery on Thursday, Dangote reiterated that the naira-for-crude deal assisted him in cutting petrol prices consistently. However, a recent report by S&P Global stated that the refinery’s fuel prices were high compared to the drop in crude prices.
The spokesperson of the refinery, Tony Chiejina, had yet to react to the remarks of IPMAN as of the time this report was filed.
The Punch
