Success Nwankwo
The Independent Petroleum Marketers Association of Nigeria (IPMAN), has raised concerns about the feasibility of purchasing petrol from Dangote Petroleum Refinery, following the affirmation by Aliko Dangote that production will start in August.
Aliko Dangote during a presentation at the refinery last month, projected an annual revenue to commence production to exceed $26 billion.
According to industry insiders, no dealer in Nigeria would be able to buy petrol from the Dangote Refinery if it is priced at the international market rate. Currently, the domestic cost at the pumps is significantly lower than the global price of a litre of petrol.
Mustapha, an official from the Independent Petroleum Marketers Association of Nigeria (IPMAN), explained the issue, stating, “The refinery is an independent commercial entity and must recoup its refining costs and add some margin before selling the product. The current price of petrol within the country is below the international price. You cannot buy the product at the international price and sell it at the prevailing retail price without incurring significant losses, which could range from N400 to N500 per litre.”
He further noted that for Dangote petrol to be available at Nigerian filling stations, the Nigerian National Petroleum Company (NNPC) would need to intervene by purchasing the product and reselling it to dealers at discounted rates.
“NNPC may have to offtake the product, just as they are currently importing from other countries, and supply it to Nigerian marketers. Only the national oil company can manage the supply chain to ensure that marketers can sell it at the approved price,” Mustapha added.
Without such intervention, he stressed, no marketer would be able to buy and sell the product without suffering substantial financial losses.
