By Elizabeth Chukwuma
The major and Independent Petroleum Marketers Association of Nigeria, IPMAN, appears to have won a battle against the Nigerian National Petroleum Corporation, NNPC, baptized, Nigerian National Petroleum Company Limited, NNPCL, with the passage of the Petroleum Industry Bill, PIB, that had been signed into Law , in August 2020, by former President Muhammadu Buhari.
The marketetrs, both major /IPMAN, and NNPCL, under the close watch of Mele Kolo Kyari, were said to have reached a working agreement , prior to the Dangote refinery produced Premium Motor Spirit, popular, petrol, hitting the Nigerian market that they would be allowed to buy the product directly from the Company instead of sourcing from it.
Zacch Adedeji, Chairman, Federal Inland Revenue Services, FIRS, and member, Presidential Committee, on Crude Oil Sales, may have introduced a new dimension to the deal when he disclosed on Friday, September 13, 2024, that NNPCL, will the sole buyer of the petrol produced from the Kano state, born multi-billionaire business mogul’s refinery, located at Lekki Free Trade Zone, LFTZ, Lagos, the nation’s Commercial nerve centre.
The major markers and the Leadership of IPMAN, may not have found this funny as they were said to have fought back to ensure that officials of the Dangote refinery keep to the original bargain reached with the national oil company, which has to do with the ‘’willing seller and willing buyer arrangement’’.
Indeed, the NNPCL, officials may have known that there is danger ahead of throwing the country into another round of lingering fuel crisis if the marketers refuse to patronize the off-taker of the Dangote refinery produced petrol, since it is not imported from any of the offshore refineries in Malta Island, Europe the or the North American country of the United States of America, US.
The major markers may have intensified pressure on Kyari , led NNPCL and the Presidential Committee , on Crude Oil Sales headed by Wale Edun, minister of Finance and Coordinating minister of Economy, that given the deregulation of the country’s downstream sector of the economy, the companies should be allowed to source petrol directly from the Dangote and private refineries across the country, including the PortHarcourt, Warri and Kaduna refineries , that are currently undergoing Turn Around Maintenance, TAM.
Kyari, the NNPCL, Group Managing Director, GMD, and the Presidential Committee, may not have wanted to push the country into another energy crisis that they have agreed to allow the marketers deal directly with the Dangote refinery to source for their petrol to be sold in their retail stations, spread all over the country.
This is evident going by the recent clarification that was said to have been given by the NNPCL, Authorities that the Dangote refinery and all other Local refineries, including the oil octopus operated and managed PortHarcourt, Warri and Kaduna refineries, expected to Resume production after the completion of the ongong TAM, are free to sell their products to any marketer, to further reinforce the notion of a free economy.
Many believe that NNPCL, may have taken advantage of its % shareholdings in the Dangote refinery to dictate who should buy directly from it or o not but lost out. Aware that it has lost the power to be sole buyer of petrol produced from the Dangote refinery may have informed why it has cried out that it will sell the product at its retail stations nationwide based on what it pocures it from the local refinery.
This may have informed why the company had announced a significant adjustment in the pump prices of petrol and other products sold in its retail petrol stations across the country to avoid losing its potential Customers to the other marketers across the 36 states of the Federation, and Abuja, the Federal Capital Territory, FCT.
.Olufemi Soneye, the NNPCL, Chief Corporate Communication Officer,CCCO, may have given an insight that the company will not sell a litre of petrol below what the company, currently obtains it from the Dangote refinery built with the North American country of the United States ,twenty million dollars.
The NNPCL, Authorities, may have shown that the distance of loading the petrol produced petrol the Dangote refinery located in Lagos, to any other part of the country would determine the pricing as it pays for the product in US dollars to the refinery operator but would sell in the local currency.
. This may have why the NPCL, retail stations around Lagos are selling the product at N950.00, per litre, as against the N999.22, sold in the north western states of Kaduna, Sokoto, Kano, and FCT. The company was said to have put the pump price of the product at N1,019.22 at its stations in Borno state, N990.22, Oyo, N980.22, Imo and Rivers respectively. The oil octopus, was said to have its selling prices I its retail stations in other states across the country.
Giving a breakdown on how the petrol prices in its filling stations across the country, was arrived at Soneye, the NNPCL’s spokesperson had said that it was arrived at based on the Dangote refinery ‘s pricing formular of N898.8.00, per litre, Nigerian Medium and Downstream Production Regulatory Authority, NMDPRA, fee, of N8.99, Inspection fee, of N0.97, distribution cost, N15.00, and a Margin of, N26.48, bringing the total cost of a litre of petrol at about N950.22, depending on the state.
As a prelude to ensuring that the pump price of petrol, sourced from the Dangote refinery will not go above the pricing arrangement that was said to have been finalized with the Federal Executive Council, FEC, under the Chairmanship of President Tinubu, the Dangote refinery, according informed sources was said to have planned sea transport for 75%, of local supply, targeting PorthHarcourt, Warri and Calabar, Capital of Cross river state.
This may have informed why there are fears in both official and unofficial circles that the pump price of petrol may not drop, in spite of the fact that shipping, insurance and port charges have been eliminate.
Soneye, the NNPCL, CCCO, who may have spoken the mind od of the GMD, had said that the drop in the pump price of petrol may not be possible for now because’’ the prices are not set by the Federal Government but negotiated directly between the parties on an arm’s length basis , in line with section 206(1) of the PIB’’.
He was said to have told those that cares to listen that the September 15, 202, petrol off take, from the Dangote refinery could not have sold anything less than the current price of N950.00 per litre, in Lagos, particular, because it has earlier confirmed to make the payments in US, dollars, in September 15, 2024, but with subsequent transactions to be made in naira and set to commence from October 1, 2024.
An insider confirmed premium the base pricing of the Dangote refinery at present includes a Platts 10ppm price of US$690/MT and an additional a US $46, bring the total cost at a US $3/MT. NNPCL, Authorities , may have gladdened the heart of Nigerian when it indicated that if any dispute arises over the quoted pricing at the Dangote refinery , it would welcome any potential discounts from the refinery Management . The NNPCL, spokesperson had said that any such discounts in the selling price of petrol to the national oil company and the other petrol marketers would be passed directly to the public as a way of ensuring transparency and fairness in pricing petrol produced in the Dangote refinery.
