Petrol Pricing Dispute: Dangote And NNPC Report Different Costs For 16 Million Litres Supplied

The Dangote Petroleum Refinery and the Nigerian National Petroleum Company Limited (NNPC) have provided differing accounts regarding the price of Premium Motor Spirit (PMS), commonly known as petrol, which was produced and distributed by the Dangote Refinery on Sunday.

While both companies have reported conflicting prices for the PMS dispensed by Dangote, independent oil marketers are still awaiting the official price from NNPC, the sole off-taker of the product. Major oil marketers have reported purchasing PMS from NNPC at N766 per litre, whereas NNPC stated it acquired the product from Dangote at N898 per litre.

NNPC also indicated it intended to load 16.8 million litres of petrol from Dangote’s refinery on Sunday, contrary to the refinery’s earlier announcement of a daily release of 25 million litres.

Olufemi Soneye, NNPC’s spokesperson, confirmed that over 70 trucks loaded with PMS departed the Dangote refinery on Sunday, marking the first day of petrol distribution from the new plant.

According to NNPC, over 48 million litres of crude oil have been supplied or scheduled for supply to the $20 billion Lekki-based refinery from December 2023 to October 2024.

Soneye addressed claims of higher prices, stating via WhatsApp that the initial loading price was N898 per litre, not the reported N1,300 per litre. He affirmed that 16.8 million litres were to be received, with over 70 trucks already loaded.

However, Dangote Refinery refuted this pricing, with Anthony Chiejina, the Chief Branding and Communications Officer, labeling NNPC’s statement as “misleading and mischievous.” Chiejina accused NNPC of undermining the refinery’s achievement and urged Nigerians to disregard the inaccurate claims, awaiting a formal pricing announcement from the Technical Sub-Committee on Naira-based crude sales to local refineries, starting October 1, 2024. He highlighted that the current stock of crude, purchased in dollars, resulted in significant savings compared to import prices.

Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), mentioned that IPMAN members had yet to receive the official price from NNPC. Some major oil marketers reported receiving petrol from NNPC at N766 per litre, with plans to begin loading the product from Monday. Marketers will pay NNPC directly, which in turn will compensate Dangote.

Major marketers involved include Conoil, NIPCO, Total, Mobil, Oando (NNPC Retail), Adova, and members of the Depots and Petroleum Products Marketers Association of Nigeria.

Dapo Segun, Executive Vice President of Downstream at NNPC, explained that petrol prices are determined by market forces, not NNPC’s regulatory authority. He detailed the negotiation process for pricing and the payment mechanism in naira for crude oil.

Devakumar Edwin, Vice President of Dangote Industries Limited, stated that the new refinery’s production capacity could meet Nigeria’s needs and create a surplus for export. He emphasized the potential for resolving the country’s fuel scarcity issues and noted the facility’s capability to load 290 tankers daily.

Finance Minister Wale Edun expressed hope that the refinery’s production would end illegal fuel smuggling and boost foreign exchange revenue. He praised the refinery’s contribution to energy security and industrialization and looked forward to lower operational costs and consumer prices as production scales up.