The only price reduction Nigerians may enjoy when the Dangote Refinery and Petrochemicals sells the Premium Motor Spirit (PMS) petrol directly to marketers will be N36/litre, which is at the present, the Nigerian National Petroleum Company Limited financing cost for letter of credit.
An insider in the Dangote and Independent Petroleum Marketers Association of Nigeria (IPMAN) products commercial terms engagement, revealed this to The Nation in confidence yesterday.
According to the source who spoke in confidence, the indigenous 650,000 barrels per day plant will sell the product at prevailing international petrol market rate. …CONTINUE READING
The Dangote Refinery source said, “The latest is that they are working on the commercial agreement and as soon as that is done they will start lifting the product.
“The price is based on international pricing. I don’t know why you people think IPMAN is going to get the PMS below international cost price.
” If anything will be removed, it will be N36/litre NNPCL financing cost for their letter of credit and profit margin.”
Crude oil constitutes approximately 49% to 59% of the retail price of PMS, based on market conditions and regional variations.
Recall that rising from its Central Working Committee (CWC) meeting in Abuja on Monday, IPMAN’s National President, Alhaji Abubakar Maigandi said the refinery has obliged the association’s request to buy and lift PMS petrol directly from the plant.
He was upbeat that the engagement with the refinery would result in lower prices.
“We didn’t start lifting products but we got assurance we are going to start lifting directly through Dangote. And that is the reason why we call this CWC to inform all members to get set for taking product through Dangote directly, not through the third party,” said Maigandi.
On pricing, he said, “Already we all know the sector is being fully deregulated and the same thing. We are going to start contacts with Dangote on the issue of price, which immediately when we get the actual price, we can be able to inform you.”
The implication is that the association which is said to own over 300,000 retail outlets will no longer buy the product from NNPCL.
They will procure the petrol directly from Dangote Refinery but the only negligible difference will be the N36/litre and the present NNPCL profit margin.
Asked to confirm whether the refinery has commenced discussions with IPMAN on direct purchase of products, its Group Chief Branding and Communications Officer, Mr. Anthony Chiejina, confirmed the plant was into talks with the marketers on the subject matter.
Speaking with The Nation on phone, he said, “If we are not discussing with them in that respect, I would have issued a rejoinder by now.”
He cleverly refused to disclose the petrol price that has been agreed with the marketers in their engagement, referring The Nation to find out from the marketers.
Recall that on 3rd November, the refinery said it benchmarks its prices against international prices relative to the price of import.
Chiejina issued a press statement that “We benchmark our prices against international prices and we believe our prices are competitive relative to the price of imports.”
The spokesperson added that at post deregulation, NNPC set the pace by selling PMS to domestic marketers at N971 per litre for sale into ships and at N990 for sale into trucks.
He also said “This set the benchmark for our pricing and we have even gone lower to sell at N960 per litre for sale into ships while maintaining N990 per litre for sale into trucks.”
Meanwhile, the Petroleum Products Retail Outlet Owners (PETROAN) yesterday confirmed holding meetings with the management of the refinery on direct purchase of products.
Its President, Dr. Billy Harry disclosed this to The Nation on phone yesterday.
According to him, PETRAON looks forward to getting a fair price from Dangote Refinery but would keep sealed lips on the pricing until the conclusion of the engagement.
His words: “PETRAON will get a fair price from him. I can’t make any comment on that until we finish discussions with him (Dangote).”
THE NATION
