Oil marketers are considering importing Premium Motor Spirit, known as petrol, following a recent announcement by the Nigerian National Petroleum Company Limited. The NNPC stated it would only fully purchase petrol from the Dangote Petroleum Refinery if the market prices were higher than local pump prices. This comes as Dangote and other local refineries are now allowed to directly sell to marketers on a willing buyer, willing seller basis.
Despite previous statements by the President of Dangote Group indicating NNPC as the sole off-taker of its petrol, the current situation has led oil marketers to explore sourcing options, including importation. The Independent Petroleum Marketers Association of Nigeria is monitoring the price of Dangote petrol to evaluate competitiveness and potential direct purchase.
With NNPC’s stance on Dangote petrol and the market determining prices without government intervention or subsidies, oil marketers are considering various sourcing options for petrol, be it from local refineries like Dangote or through imports. The competitive market dynamics are expected to drive pricing equilibrium and ensure a sustainable supply of refined petroleum products.
The government’s directive for NNPC to sell crude to domestic refineries in naira aims to reduce foreign exchange dependency on crude oil imports. This move is projected to yield significant annual savings and reduce monthly forex expenditure on petroleum products. The ongoing developments in the petroleum industry reflect a shift towards market-driven pricing and supply dynamics.
While Dangote’s refinery aims to end fuel importation, the current situation suggests continued importation as NNPC’s stance on purchasing Dangote petrol remains contingent on market prices. Talks between NNPC and Dangote seem to have stalled, potentially prolonging fuel importation.
Observers note the government’s reluctance to cease fuel importation, especially with NNPC’s refineries yet to be operational. The evolving landscape underscores the complexities of the petroleum industry, with market forces shaping pricing and sourcing decisions for petrol in Nigeria.