The Nigerian National Petroleum Company (NNPC) Limited is making efforts to end the scarcity of petrol in Lagos and its surrounding areas. In line with this, Dangote Refinery and oil marketers are working together to finalize decisions on pricing and delivery of gasoline to filling stations across the country.
Dangote Refinery, with a refining capacity of 650,000 barrels per day, plans to start production and distribution of petrol in May 2024. Currently, a large portion of petrol consumed in Nigeria is imported from the global market. The parties involved are engaging in discussions regarding pricing, distribution, and margins for stakeholders in the value chain, including transporters and insurers.
Depot owners currently purchase petrol from NNPC Limited at a rate of N556 per litre and sell it to independent marketers at N640 per liter. However, independent marketers have proposed a price of N550 per litre to Dangote Refinery. These negotiations are ongoing, and the final price per litre will vary across different parts of Nigeria due to distance and delivery costs.
The President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abubakar Migandi Garima, confirmed the ongoing discussions with Dangote Refinery. He stated that the proposed lifting price in Lagos is N550 per litre of petrol and expressed the expectation that locally refined petrol would be cheaper than imported petrol due to the availability of local crude oil and the removal of transportation costs.
Experts and consumers are optimistic about the benefits of domestic refining. Professor Wumi Iledare, the Executive Director of the Emmanuel Egbogah Foundation for Petroleum and Energy Industry Economics and Policy Advocacy, believes that the price of petrol in Nigeria could be lower when Dangote Refinery operates at full capacity. A motorist expressed hope that the Dangote refinery’s gasoline would be cheaper than the imported product.
Refinery owners, represented by the Crude Oil Refinery-owners Association of Nigeria (CORAN), have called for support from the government to complete other indigenous refinery projects in different stages of construction across Nigeria. They propose the creation of a $1 billion fund to assist local investors and address the challenge of insufficient funds. Such support would reduce dependence on imported gasoline, conserve foreign exchange, and create additional jobs.
Dr. Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), anticipates positive impacts across all sectors if Nigeria can take advantage of Dangote Refinery to reduce petroleum product imports and address the foreign exchange crisis.
The Nigeria Labour Congress (NLC) refrained from commenting on the development, stating that it is premature to do so without concrete information.
Regarding the current scarcity of petrol in certain areas of Lagos, the Chief Corporate Communications Officer of NNPC Limited, Olufemi Soneye, explained that the issue was due to a problem at one of the depots in the area. However, NNPC Retail Limited, the retail arm of NNPC, has resolved the issue, and normalcy is expected to be restored. NNPC Limited urges motorists in Lagos to avoid panic buying, as efforts are being made to ensure an adequate supply of petroleum products in the area.
