Dangote’s Petrol Price is Linked to The Forex Rate – NNPC.
As Nigerians anticipate the release of petrol from the $20bn Dangote Petroleum Refinery, the Nigerian National Petroleum Company Limited (NNPC) has announced plans to lift the product on September 15. The company emphasized that the pricing of petrol will be influenced by foreign exchange rates and market dynamics, given that the market has been deregulated. Currently, around 2,000 tankers are waiting to load the product at various depots in Lagos, Warri, and Port Harcourt.
In addition, the Federal Government has indicated that a significant supply of petrol is expected over the weekend, as vessels have begun offloading. However, officials have ruled out any price fixing for Premium Motor Spirit (PMS). This suggests that the government may have effectively ended petrol subsidies, reflecting its recent stance on pricing.
NNPC has pointed to foreign exchange illiquidity as a key factor affecting petrol price fluctuations, which are now governed by unrestricted free market forces, as outlined in the Petroleum Industry Act (PIA). The Executive Vice President of Downstream at NNPC, Adedapo Segun, stated during a live television program that the current fuel scarcity is likely to ease in the coming days as more stations recalibrate and resume selling PMS. He reiterated that petrol prices are now determined by market forces rather than government intervention, with the exchange rate playing a crucial role in this pricing structure.
Dangote petrol
Upon the commencement of lifting PMS from the Dangote refinery, Segun mentioned that NNPC is currently awaiting the timeline set for September 15 by the refinery. He noted that the national oil company operates nearly a thousand filling stations across the country and is working closely with marketers to ensure that these stations open early and close late, thus maintaining a steady fuel supply to meet the demands of Nigerians.
In addition, Segun highlighted that NNPC is engaging with relevant authorities to prevent product diversions and ensure timely deliveries to all filling stations. He expressed optimism that the scarcity of fuel would ease in the coming days as more stations recalibrate and resume operations.
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Overall, the efforts being made aim to enhance the availability of fuel for the public. With the collaboration between NNPC, marketers, and authorities, there is hope for a more stable supply and improved access for consumers in the near future.
2,000 tankers
The National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, reported that many dealers have their trucks stuck at depots, waiting for products from NNPC. He noted that the queues in Abuja are significant, and despite independent marketers having paid for loading tickets months ago, these have not yet been cleared.
Zarma emphasized that, with the recent petrol price increase, there has been no official communication regarding any additional fees required before lifting orders. Currently, only the retail arm of NNPC is supplying products to its stations, leaving many independent marketers in a difficult position.
He mentioned that over 2,000 trucks are at various depots, but NNPC will not release products until the price difference is settled. However, as of now, NNPC has not provided any information regarding what that price difference entails.
In related news, Dangote refinery announced that NNPC has not yet begun lifting petrol from its facility. The Chief Branding and Communications Officer of Dangote Group, Anthony Chiejina, refuted claims that NNPC was selling petrol at N897 per litre, clarifying that they have not finalized their contract with NNPC. He urged the public to disregard misleading headlines regarding pricing, as the PMS market is strictly regulated by government authorities.
30 million barrels
NNPC has announced that it has supplied 30 million barrels of crude oil to the Dangote refinery to date, with plans to deliver an additional 17 million barrels in the near future. This initiative is part of the Federal Government’s strategy to increase crude oil sales to local refineries. Segun, a company representative, shared this information during an interview on Arise Television, highlighting the importance of supporting domestic refining capacities.
In terms of upcoming deliveries, NNPC plans to supply 6.3 million barrels in September and 11.3 million barrels in October. Segun emphasized that the 6.3 million barrels would be transported in seven cargoes. However, he expressed concerns regarding the current petrol pump prices, stating that they do not accurately reflect market realities.
Segun pointed out that NNPCL is currently the sole importer of Premium Motor Spirit (PMS) in Nigeria, which he described as an abnormal situation. He advocated for a market-driven approach to fuel pricing, suggesting that prices should be determined by market forces rather than a single entity’s influence. This perspective indicates a need for a more competitive market environment.
He clarified that NNPC’s status as the sole importer was not an intentional choice but rather a reaction to changing market dynamics. As other players reduced their involvement, NNPC stepped in to fill the gap. Segun stressed that the company does not seek to monopolize the market but is responding to existing conditions.
To achieve a stable fuel supply and pricing, Segun noted that ideal market conditions are essential, including a more liquid foreign exchange market. He hinted that broader economic reforms might be necessary to address the challenges surrounding fuel pricing, underscoring the complexity of the situation and the need for comprehensive solutions.
