Aliko Dangote, Chairman of the Dangote Group, has announced that Premium Motor Spirit (PMS), commonly known as petrol, from his refinery will hit the market by the third week of July.
While this news is cause for optimism, concerns have been raised among marketers nationwide regarding its potential impact on prices.
The anticipated distribution and sale of Dangote’s refined petrol mark a significant milestone since the commissioning of the Dangote refinery in May 2023.
As the first private enterprise set to sell petrol to Nigerians, there was hope that Dangote’s entry would drive competitive pricing in the market. However, according to a report by the Punch newspaper, this expectation may not materialize.
Marketers are apprehensive that Dangote’s petrol could be more expensive than anticipated due to the refinery’s ongoing procurement of crude oil from the United States and other countries at higher costs.
This precedent has previously led to higher prices for Dangote’s diesel and aviation fuel, as reported in interviews conducted by Punch with industry stakeholders.
If these concerns prove valid, it would be a blow to Nigerian consumers, especially as petrol prices have escalated sharply over the past year, from an average of N200 to N700 per liter. The Dangote refinery had been seen as a potential mitigator of price inflation.
During the May 2023 inauguration of President Bola Tinubu, the sudden removal of fuel subsidies sent shockwaves through the market, exacerbating price increases for this essential commodity.
Hammed Fashola, National Vice President of the Independent Petroleum Marketers group of Nigeria, voiced concerns to Punch about the potential impact of imported crude on Dangote’s petrol prices.
He suggested that government support in ensuring adequate local crude supply to Dangote could alleviate these price pressures, thereby potentially stabilizing the market.
“I will advise that the government should assist Dangote in the supply of crude oil. If Dangote can obtain sufficient crude locally, I believe this could resolve many issues.
There might be no need for further petrol imports, especially if Dangote can maintain reasonable pricing,” Fashola emphasized.
