Marketers Discuss Strategies for Pricing and Distribution Ahead Of the Opening Of Dangote Refinery.

 Oil marketers have stepped up their efforts to meet with the Dangote Refinery's management in order to discuss final choices about the pricing and delivery of petrol to filling stations around the country, as the refinery is scheduled to open in May 2024.

In May, Dangote Refinery, which has the capacity to refine 650,000 barrels of crude oil per day (bpd), plans to start producing and distributing the product, the majority of which is now imported from outside Nigeria.

According to the Independent Petroleum Marketers Association of Nigeria, representatives from the Dangote refinery, oil marketers, transporters, insurers, and other stakeholders have been meeting and sharing notes over price, distribution, and margins.

While marketers have suggested N550 per litre to Dangote Refinery management, depot owners purchase petroleum from NNPC Limited for N556 per litre and sell it to independents for N640.

Alhaji Abubakar Migandi Garima, the president of IPMAN, the Independent Petroleum Marketers Association of Nigeria, stated on Sunday:

“We have been discussing with Dangote Refinery. The discussion, centring on pricing, margins and other issues, is still ongoing.

“We have proposed that the lifting price should be N550 per litre in Lagos. The price of the product will differ from one part of Nigeria to another because of the distance and cost of delivering petrol to different locations.

“We are currently waiting on Dangote Refinery to conclude and communicate the price per litre, so we can plan to lift the product when it comes on stream.

‘’We expect that the price of the locally refined petrol would be cheaper than imported petrol, due mainly to local availability of the bulk of its crude oil and removal of transportation cost.”

Additionally, Professor Wumi Iledare, Executive Director of the Emmanuel Egbogah Foundation for Petroleum and Energy Industry Economics and Policy Advocacy, stated:

“The price of petroleum is majorly correlated with the acquisition cost of crude oil. The cost of running the refinery and opportunity cost of capital contribute marginally. Distribution and retailing costs are important but the crude cost matter the most.

‘’Thus, low price of petrol in Nigeria when Dangote Refinery operates at full capacity, is a possibility indeed, ceteris paribus.”