Oil Marketers Propose New Petrol Price as Dangote Refinery Prepares to Sell

Oil Marketers Propose New Petrol Price as Dangote Refinery Prepares to Sell

  • Petroleum product marketers in Nigeria are proposing a new petrol price as the Dangote refinery prepares to begin sale
  • The marketers are reportedly proposing about N550 per litre of petrol to the refinery management
  • The move was because NNPC Limited sells the product to depot owners at N556 per litre, which in turn sells to marketers at N640 per litre

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

According to a previous report, the Dangote Petroleum Refinery in Lagos would soon begin pumping petrol to the domestic market, barring unforeseen circumstances.

The refinery and oil marketers have increased efforts to make final decisions on pricing and delivery of petrol to filling stations nationwide.

Marketers negotiate new petrol price with Dangote Refinery
Aliko Dangote's refinery to begin selling petrol soon. Credit: Bloomberg/Contributor
Source: Facebook

Marketers to crash petrol below NNPCL pricing

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Aliko Dangote speaks on why his refinery reduced price of diesel

The 650,000 bpd-capacity refinery plans to produce and distribute petrol by May 2024.

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According to reports, there are indications that marketers and refinery management have been meeting on the new petrol pricing, distribution, and margins for registered stakeholders in the value chain, which includes transporters and insurers.

Depot owners reportedly buy petrol from the Nigeria National Petroleum Company Limited (NNPCL) at N556 per litre and sell to independent marketers at N640 per litre.

Vanguard reports that the independent marketers have proposed N550 per litre to Dangote refinery management as the parties continue discussing new pricing.

Marketers confirm talks with Dangote refinery

Abubakar Migandi Garima, the president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), reportedly confirmed the development and said the association has been in talks with the refinery management regarding pricing, margins and other issues.

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Oil marketers propose new diesel price as Dangote moves to crash cost

He said the price of petrol is primarily correlated with the acquisition of the cost of crude oil, stating that the cost of running the refinery and the opportunity of capital contribute marginally.

He said distribution and retail costs are significant, but crude oil prices are essential.

“Thus, low price of petrol in Nigeria when Dangote Refinery operates at full capacity, is a possibility indeed, ceteris paribus,” Migandi said.

Dangote confirms commencement of product supply

In an earlier report by Legit.ng, Devakumar Edwin, the executive director of the Dangote Group, announced on Tuesday, March 2, 2024, that the Dangote Refinery has started supplying petroleum products to the local market.

As reported by Reuters, this was verified by executives belonging to various associations of petroleum marketers.

The president of the Independent Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, spoke about selling diesel into the local market.

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He said that local petroleum marketers set a price of N1,225 ($0.96) per litre of diesel after entering into a bulk purchase agreement and then added their markup.

Dangote refinery crashes diesel price

Legit.ng previously reported that the pump price of diesel has dropped from N1,700 per litre, which it sold a few weeks ago, to about N1,350 per litre in some locations in Nigeria following the product's sale by Dangote Petroleum Refinery.

Findings show that the $20 billion, 650,000 bpd-capacity refinery began pumping diesel to the domestic market on Wednesday, March 27, 2023.

Since it began selling diesel, the company reportedly sold at least one million litres from the refinery to each registered marketer.

Source: Legit.ng

Authors:
Pascal Oparada avatar

Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner. Email:pascal.oparada@corp.legit.ng

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