As reported by the Punch newspaper, the Independent petroleum marketers in Nigeria (IPMAN) estimates that the Dangote Petroleum Refinery would sell its Premium Motor Spirit, widely known as petrol, at N600 or N650 per liter.
IPMAN National Vice President, Hammed Fashola, relayed to the Punch, during an interview that the Dangote refinery would reduce gasoline costs if it gets the necessary assistance, particularly in terms of crude supplies.
Given that late in July, the Federal Executive Council (FEC) has approved a proposal for the state oil company, NNPC Ltd, to begin selling crude oil in naira to the Dangote refinery, and to other refineries, IPMAN anticipates a lower price for PMS than is currently being sold.
“We are marketers, we go for the best. We have been buying from the NNPC, but if the opportunity of Dangote comes and the price is favorable, we will grab it. It depends on the price,” Fashola stated.
“The official price from the NNPC is around N570/litre, but the third parties, the private depots, sell PMS to most of our members at N700 and above. “Plus or minus, we hope Dangote can sell between N600 and N650/litre. N600 is still okay,” he added.
Earlier projections
This was owing to the fact that Dangote Refinery was at the time buying crude oil from the United States and other nations at a greater cost, the same factor that made the Dangote diesel and aviation fuel expensive.
The price then ranged from N700 to N1000, and the marketers believed that Dangote would sell petrol at the same range or higher.
“I will advise that the government should assist Dangote in the supply of crude oil. If Dangote can get an adequate supply of crude oil locally, I think the whole problem will be solved somehow. I don’t think there will be any need for anybody to go and bring in petrol again, especially if Dangote is selling at a reasonable price,” Hammad said at the time.
This projection, however, is a far cry from an even earlier estimate from operators of modular refineries which suggested that petrol prices could drop to as low as N300 once Dangote and other local refineries begin supplying refined petrol.
This projection had been made in June, when the price of petrol stood at N620. Back then marketers believed that petrol would be produced in massive quantities by indigenous refiners, and raw materials would be sold in Naira, ultimately taking the price close to fuel price pre-subsidy removal.
While Nigeria has agreed to sell crude to Dangote, a month long debacle between Dangote and the Nigerian government seems to have taken its toll, bringing the projection up from the initial N300 to now N600.
