The President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abubakar Migandi Garima , has said in an Arise TV interview that Nigerian oil marketers are meeting Dangote Refinery next week to discuss the price of Premium Motor Spirit (PMS), popularly known as petroleum. Garima said that the association is not aware of the price that Dangote Refinery wishes to sell petrol, an issue he is sure will be resolved at the meeting next week.
A Transition to Market Price for Petrol ?
In early September 2024, Dangote Refinery announced the start of its production of Premium Motor Spirit (PMS), commonly known as petrol, and revealed that the Nigerian National Petroleum Corporation Limited (NNPCL) would be the sole buyer of its petrol. However, the NNPCL quickly issued a counter statement, denying that it would exclusively purchase petroleum from the Dangote Refinery.
Adding to the confusion, the NNPCL’s statement included an unusual “clarification,” asserting that it would only buy petroleum from the Dangote Refinery if the price was lower than the current “pump price in Nigeria.” This stance seems contradictory, given the NNPCL’s earlier endorsement of market deregulation and a transition to market-based pricing. The “pump price” in Nigeria is heavily subsidized, often by as much as 50%, which raises the question of how the NNPCL expects Dangote Refinery to offer petroleum at a price lower than this subsidized rate while operating under a market-driven pricing regime.
It seems certain that the NNPCL will not announce formally an end to the petrol subsidy given the extremely political sensitivity of the issue and the unwillingness of the government to engage Nigerians on the case for eradicating the subsidy. The NNPLC had on 3 September 2024 increased the pump price of petrol from N6o0 to N855 per litre to wide criticism from Nigerians who face increasing economic hardship from rising inflation. But petrol queues persist all over the country and are not likely to disappear because the NNPLC is running out of dollars to keep importing refined petroleum that it sells at around 50% subsidy. The state-owned oil company owes international oil traders $6.8 billion. This makes the possibility of deal between Dangote Petroleum Refinery and the petrol marketers to sell at a market price likely while the NNPCL and the federal government look the other way. Many Nigerians all over the country, especially outside the big cities, are already buying petrol at between N1,000 to N,1,200 per litre.
