Petroleum marketers are concerned about potential pricing challenges as Dangote Petrochemical Refinery prepares to introduce Premium Motor Spirit (PMS) into the local market within the next few weeks. The refinery, boasting a capacity of 650,000 barrels, has faced setbacks in sourcing local crude from international oil companies (IOCs), compelling it to import crude from the United States and other countries at a higher cost. This situation has rendered its diesel and aviation fuel less competitive locally due to pricing disparities.
Stakeholders fear that these high import costs could inflate production expenses, potentially leading to increased ex-depot prices for Dangote PMS. Aliko Dangote, Chairman of the Dangote Group, has confirmed plans to launch PMS by mid-July, raising hopes among consumers for reduced fuel prices following the removal of subsidies. However, concerns persist over Dangote's reliance on imported crude and its impact on price stability.
Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized the need for government intervention to facilitate local crude supply to Dangote, advocating that this would mitigate pricing concerns and enhance fuel accessibility nationwide. He urged Dangote not to monopolize the market if supported by the government, stressing the importance of pricing transparency and fair competition.
Fashola also anticipated a potential narrowing of price differentials between major and independent marketers once Dangote's PMS enters circulation. He called for swift finalization of partnership discussions between Dangote and IPMAN to streamline market operations and ensure broader market access for all stakeholders.
Overall, while anticipating the refinery's operational launch, stakeholders await clarity on pricing dynamics, contingent upon how Dangote secures its crude supply.
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