…promises to change petroleum industry dynamics
…as NNPC raises pump price
Nigerians are waiting to see the impact on supply and pricing as the Dangote Petroleum Refinery displayed its much-awaited locally produced petrol Tuesday, promising to change the dynamics of the production and marketing of the commodity in the country and beyond.
This is as the Nigerian National Petroleum Corporation (NNPC) Limited on Tuesday morning raised the pump price of petrol to N855 per litre from N617 per litre, two days after it cried out that the burden of petrol price has pushed it into over $6 billion debt. This is an increase of over 45 percent.
Earlier indicators showed the commodity in some private depots had been increased to between N920 and N950/litre.
Experts say expecting a price slash for petrol from the Dangote Refinery in the immediate may not be feasible but that supply shortages would quickly become a thing of the past.
Speaking at a press briefing Tuesday, where he officially announced the Dangote Refinery’s progress in petrol processing, billionaire businessman and proprietor of the $20 billion refinery, Aliko Dangote, said the company’s product will match the quality of the petrol sold in the US and anywhere in the world.
“As soon as we finalise with the NNPC, our products will start going into the market,” he said.
Displaying a sample of the refinery’s petrol in a bottle, he said, “You might see it like a different colour, but that’s the real thing. So, you are now going to have good petrol where the engines of your vehicles will last longer. You will not be having an engine issue, which a lot of us were having. It won’t happen at all. The quality here will match that of quality of anywhere in the world…we will make sure that nobody will beat us in terms of quality.”
He said the introduction of Dangote Refinery’s petroleum into the Nigerian market will show Nigeria’s true consumption of petrol, as it will reduce the need for imports, and by extension, reduce round-tripping that is carried out.
“There is quite a lot of what you call round-tripping where people now do documentation and the fuel does not come into Nigeria, and this is a fact. So, right now, as we have this refinery working, it will show the true consumption of Nigeria. We can track every single loaded truck and we will try as much as possible to track the loaded ships,” he said.
Dangote said the refinery will also supply polypropylene which is used in the packaging, automotive, consumer goods, medical and cast films industries.
Asked to speak on the pricing of petrol from his refinery, he said, “It is an arrangement which is designed and approved by the Federal Executive Council led by His Excellency, President Bola Ahmed Tinubu.
“As soon as it is finalised, which he (Tinubu) is pushing, once we finish with NNPC, it can be today, it can be tomorrow, we are ready to roll into the market.”
Some watchers, however, remain yet hopeful, pinning their optimism on the refinery’s recent slashing of the pump price of diesel in the country from N1,200 to N1,000 per litre.
Further hopes are being pinned on savings expected to be made from the elimination of haulage costs for crude oil abroad for refining and similar costs for the importation of refined products into Nigeria.
Meanwhile, the nation’s four government-owned refineries offer no succour, as they are out of commission and under prolonged repair.
On the increased price of petrol by the NNPC, the company’s spokesperson, Olufemi Soneye, had earlier declared that the national oil company was facing financial strain. The NNPC is the sole importer of petrol into Nigeria, shouldering subsidies on the commodity running into several trillions of naira.
“NNPC Ltd faces financial strain due to PMS supply costs, impacting supply sustainability. NNPC Ltd has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.
“In line with the Petroleum Industry Act, NNPC Ltd remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” Soneye stated.
Marketers said officials from the oil company had informed petrol dealers of the development, stressing that this may further lead to a hike in the pump prices of petrol in the coming weeks.
