Concerns are mounting that the $20 billion Dangote Refinery, with an estimated refining capacity of 650,000 barrels per day, could face significant hurdles that may impact its success.
The refinery is reportedly struggling with a range of challenges involving government policies, regulatory requirements, and competitive pressures from other marketers. The Independent Petroleum Marketers Association of Nigeria (IPMAN) recently highlighted these concerns, noting that fuel prices at the Dangote Refinery have been higher than those from alternative sources.
IPMAN announced that its members may consider importing fuel from other sources to offer lower prices than those available at the Dangote Refinery, in an effort to provide affordable options for Nigerians.
Yakubu Suleiman, IPMAN’s National Assistant Secretary, discussed this on Arise Television’s *Morning Show*, where he emphasized that international market prices should dictate fuel costs. He expressed concerns that the Dangote Refinery should communicate its pricing transparently and consistently, so stakeholders can make informed decisions.
Suleiman stated: “Prices are determined by international standards. Ideally, Dangote should announce his product’s price daily. However, without consistent engagement with stakeholders, it’s difficult to expect independent marketers to exclusively rely on the refinery’s supply. In a deregulated market, we must source products at the most competitive prices. If the Dangote Refinery’s fuel is priced at, say, N1,000 per liter, and other sources offer N900 per liter, we cannot expect our members to choose a more expensive option. Profitability is crucial, and we must prioritize the best options for our members.”
Suleiman further explained that while Nigeria operates under a deregulated market, there is concern that the Dangote Refinery is seeking to monopolize the market, affecting pricing and availability options for independent marketers.
He added: “Just last week, Dangote’s fuel price was higher than others. The price of crude has already started to drop, yet Dangote’s price per liter was N995, not including transportation and additional charges. Our members cannot be expected to absorb these costs and sell competitively. We must keep Nigerian consumers in mind and ensure they have access to affordable fuel options.”
Group Chief Branding and Communications Officer, Dangote Group, Anthony Chiejina in a statement on Sunday said: “We had lately refrained from engaging in media fights, but we are constrained to respond to the recent misinformation being circulated by IPMAN, PETROAN, and other associations.
“Both organisations claim that they can import PMS at lower prices than what is being sold by the Dangote Refinery. We benchmark our prices against international prices, and we believe our prices are competitive relative to the price of imports. If anyone claims they can land PMS at a price cheaper than what we are selling, then they are importing substandard products and conniving with international traders to dump low quality products into the country, without concern for the health of Nigerians or the longevity of their vehicles. Unfortunately, the regulator (NMDPRA) does not even have laboratory facilities which can be used to detect substandard products when imported into the country.
“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. 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.
“In good faith, and in the interest of the country, we commenced sales at these prices without clarity on the exchange rate that we will use to pay for the crude purchased.
“At the same time, an international trading company has recently hired a depot facility next to the Dangote Refinery, with the objective of using it to blend substandard products that will be dumped into the market to compete with Dangote Refinery’s higher quality production.
“This is detrimental to the growth of domestic refining in Nigeria. We should point out that it is not unusual for countries to protect their domestic industries in order to provide jobs and grow the economy. For example, the US and Europe have had to impose high tariffs on EVs and microchips in order to protect their domestic industries.
“While we continue with our determination to provide affordable, good quality, domestically refined petroleum product in Nigeria, we call on the public to disregard the deliberate disinformation being circulated by agents of people who prefer for us to continue to export jobs and import poverty.”
Commenting on X (formally Twitter), Obynosocily @da_gentlePrince said “I think the substandard/blended imported will do us more good than your overpriced products. Once again you want the monopoly to suffocate the people just like you did with cement but this time you are going to fail.”
Ayomitide @OracleAyo said”We will buy wherever it’s cheaper. The rest is your wahala.”
Abba Audi Benis @AbbaAudu_ said “NNPC is selling base on your price, stop lying. NNPC was finally vindicated that at first instance you want a higher price but they negotiated to a lower price.”
The stakeholders in the industry need to come together to resolve all lingering crises in the interest of the nation’s economy.
