As the Dangote Petrochemical Refinery prepares to introduce Premium Motor Spirit (PMS) into the Nigerian market within the next two to three weeks, concerns are rising among petroleum marketers regarding potential price hikes. The refinery’s reliance on imported crude oil, due to challenges in securing local feedstock from international oil companies (IOCs), may impact production costs and consequently influence the ex-depot price of Dangote PMS.
Aliko Dangote, Chairman of the Dangote Group, had earlier announced the imminent entry of Dangote PMS into the market, amid expectations of relief from soaring fuel prices following the removal of subsidies by President Bola Tinubu in 2023.
However, with Dangote Refinery’s continued importation of crude from the United States and other countries, concerns have been raised about the potential for higher production costs. This situation has led to fears among stakeholders that the refinery’s inability to access local crude may undermine hopes of cheaper PMS for Nigerians.
Speaking on behalf of petroleum marketers, Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized the potential price implications of importing crude oil. He highlighted the challenges faced by Dangote in securing local crude supplies and urged the federal government to intervene by facilitating local crude oil supply to the refinery.
Fashola stressed the importance of fair pricing and cautioned against monopoly practices if Dangote Refinery achieves local crude oil support from the government. He underscored the need for transparent pricing that benefits both consumers and the industry at large.
Meanwhile, Olufemi Adewole, Secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), echoed similar sentiments regarding the pricing of Dangote PMS. Adewole emphasized that the cost of crude procurement would ultimately determine the price set by Dangote Refinery, highlighting the association’s readiness to purchase and distribute PMS once available.
Amidst these developments, concerns over potential market monopolization by Dangote and the need for inclusive partnerships with petroleum marketers have surfaced. IPMAN and DAPPMAN have called for collaborative efforts to ensure fair pricing and sustainable fuel supply across the country.
The Dangote Group, represented by its officials, has continued to advocate for support in accessing local crude oil, citing challenges posed by IOCs in Nigeria. They have emphasized the refinery’s commitment to operational transparency and fair market practices.
As anticipation builds ahead of Dangote PMS’s market entry, stakeholders remain watchful of developments in crude procurement and pricing strategies, anticipating their impact on the downstream petroleum sector in Nigeria.
