₦airaland Forum

Oil marketers say they have commenced negotiations with international traders to import cheaper Premium Motor Spirit (petrol) into Nigeria to remain competitive in the business.

This is even as the Independent Petroleum Marketers Association of Nigeria and oil workers insisted that the price of petrol from the Dangote Petroleum Refinery should be cheaper than N825 per litre.

Speaking with our correspondent, the marketers complained of price volatility caused by Dangote refinery’s repeated price cuts, saying the only way to get petrol at a lower price was to strike deals with foreign traders while hoping the Nigerian National Petroleum Company Limited would resume refining activities soon.

In an interview with our correspondent, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said an arrangement is ongoing, describing it as the only means to get affordable petrol.

Gillis-Harry said prices from domestic refiners were worrisome, a development that led to the shutdown of many filling stations.

“How do you get cheaper fuel? It is only by arrangement. We are not refining, and those who are refining are giving us prices that are a bit worrisome in the way the prices are being skewed. You can see that so many filling stations don’t have products because they don’t have the money to buy, as the money to do business has evaporated.

“So, of course, marketers will have to find a way to buy what we need to buy. The only way we can do it is to collaborate and buy products from a very dependable importer. That’s the only way we can do it,” he said.

According to him, PETROAN once reached an agreement with a foreign trader to import petrol at the rate of N550 per litre, adding that the transaction would be in naira instead of dollars.

Asked if this was possible, the PETROAN boss replied, “Of course, it’s possible. For instance, before we stopped our importation scheme, we were already negotiating with people to sell us products for as low as N550. That was November 2024; N550 per litre. That’s what we were negotiating. Any day I see you, I will show it to you; I can’t send you confidential economic documents. Any day you see me, ask me, and I’ll show you the offers that were given to us from different parts of the world.

“As it is today, I think the only way we can really reduce costs is to make sure that the profit margins are extremely low and we buy in Nigerian naira, not in dollars,” he added.

On whether the international traders are ready to sell in naira, he said the power of negotiation and large numbers would convince them.

“It is negotiation. That is the power of numbers. That’s why PETROAN can do that because we have the numbers to determine how our businesses can come.

“But now, we have to make sure that we get it right. We supported local refining with all our hearts, but look at what local refining is doing to us. We can’t even be in business. You buy the product today at N870, and before you reach your station, it has been reduced to N825. From N825, you are looking at how it increases to N890. From N890, it comes down to N865. Those kinds of movements that are not clearly determined are a challenge,” he stressed.

Our correspondent asked the retailer to clarify if he was also of the opinion that Dangote refinery’s fuel was not cheap enough, but he retorted that he was not referring to Dangote.

“I am not addressing Dangote. Dangote is a businessman on his own, and he is doing what he wants to do. Is it the cheapness of a product or the ability to meet the terms of the business?

“If a price is placed on a product, that does not mean that you are just going to carry the money and pay. In going to get the money, there is a cost. Did you add that? In selling the product, there is a cost, and between the sales, there is a price shift up or down. So, there is no stability to monitor what risks you can take with your investment,” Gillis-Harry stated.

The PETROAN president added that talks were ongoing with the foreign traders the association struck deals with in November.

“We are certainly talking to them while we are encouraging local production, too. And we are having very strong support from some local refiners. They have not started, but we have an idea that things can change for the better and the benefit of Nigerians. So, we are working. Those are internal businesses that are difficult to discuss in public,” he concluded.

Gillis-Harry accused the Dangote refinery of plotting to monopolise the downstream sector with his plan to start distributing fuel across the nation. He said there could be job losses among tanker drivers and marketers, whose business, he said, would shut down.

Speaking in another interview, the Publicity Secretary of IPMAN, Chinedu Ukadike, told our correspondent that some importers were already selling PMS below Dangote’s prices.

“My comment is that since the President has eased the cost of naira-dollar exchange, it should have an impact on Nigerians. The benefits should have come down to the petroleum product pricing at the pumps. Imported products come from foreign refineries that use crude oil, too. They will also have to use a vessel to bring in this product. So, if somebody buys this product from overseas and uses a vessel to bring it here, pays all the taxes, and still sells at the same price as Dangote, don’t you think that something is wrong with Dangote’s price?

“If you remove the importation charges, the forex charges, you remove the vessel charges and other charges, Dangote should have given us something more competitive and pocket-friendly,” he said.

Ukadike told The PUNCH that with the deregulation of the sector, there was supposed to be a price war, but the sector has not seen anything similar, especially with the failure of the government refineries to produce fuel.

“This is a deregulated market, no more subsidies of petroleum products. Factors of demand and supply determine the price; this is when the price is supposed to be competitive, and there is supposed to be a price war that should give us the reality of the market. We’re not getting the reality of the market. It seems that what we have now is artificial.

“The government should look at our refineries because it’s only our refineries that can tone down the price of Dangote fuel. Now, Dangote controls the price. Without Dangote, the price cannot come down, and the price cannot go up. Why will it be so? That is an artificial monopoly.

“If NNPC refineries are on and producing, and they are selling their products at N600 per litre, don’t you think that Dangote will sell for N550? That’s where we are missing it. The non-functionality of the government refineries has also created a monopoly for Dangote because he now decides the prices of petroleum products that will be sold tomorrow,” he stated.

However, Ukadike agreed that Dangote had conquered fuel scarcity.

“We have products now, and I’m happy about that. Imported products are also supplementing it. Dangote has promised that he has sufficient products in his tank that can take Nigeria back to a 60-day sufficient period. We quite appreciate that. But what we’re now looking at is that we’re an oil-producing country. We’re supposed to have the benefits of oil production and a refinery,” he added.

Meanwhile, the Dangote refinery debunked allegations of monopoly following the plan to begin direct fuel supply to filling stations. The company said the policy would result in lower fuel prices at filling stations, adding that it would create more jobs and cut inflation.