After the federal government let marketers purchase directly from the Dangote refinery and import from other sources, James Tor, National Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that fuel prices would decrease.
In an interview, Tor made this claim about the federal government’s recent attempt to de-regulate the market so that marketers may directly bargain with Dangote Refinery over petrol costs.
According to him, this action would break the monopoly held by the Nigerian National Petroleum Corporation (NNPC) Limited as the nation’s only buyer of petroleum products.
He added that the federal government has permitted imports from other sources in addition to direct purchases from Dangote.
“I can say yes (that petrol price will decline) because there will be numerous places to get the product. When people selling the product are many, definitely they will come down with the price.”
“And we that are selling it, we go for the person that is selling less, so there must be a decline. NNPC currently has the monopoly of handling everything, which is the source of the problem. If they enable us to receive it from Dangote refinery, we held a meeting following my president’s statement, and it was agreed that marketers will now be able to get their products directly from Dangote refinery. Not only that, but they have now agreed to provide us with an import licence.”
“By so doing, we believe and are very confident, because we have partners in the country and outside the country that we can partner with. And we offer the things at affordable prices. Nigerians are our people, after all,” Tor remarked.
Background
As previously reported by THE NEWS CHRONICLES, once NNPC resigned as an intermediary between the two parties, the federal government permitted marketers to purchase petroleum products directly from the Dangote refinery.
According to Finance Minister Wale Edun, the direct purchase mechanism enables marketers to directly negotiate commercial terms with refineries, promoting a more competitive market environment and facilitating a more seamless petroleum product supply chain.
“New Direct Purchase Model: The most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries. This marks a departure from the previous arrangement where the Nigerian National Petroleum Corporation (NNPCL) served as the sole purchaser and distributor of PMS from the refineries,” he explained.
What To Note
The federal government has taken a significant step towards complete deregulation of the oil business by permitting marketers to buy directly from the Dangote Refinery, from NNPCL being the only purchaser of petroleum products.
NNPCL disclosed in September that it was purchasing gasoline at N898.78 per litre from the Dangote Refinery and reselling it to retailers for N765.99 per litre, with a N133 per litre subsidy.
The business did point out that this concept was not viable, though.
When the Dangote Refinery first started producing petrol, NNPCL was the only off-taker; this is no longer the case. NNPCL raised the price of gasoline at all of its retail locations earlier this week to more than N1,000 per litre.
Prices increased from N617 to over N900 per litre last month; in several places, they even surpassed N1,000. Prices increased by NNPCL last week, reaching about N998 in Lagos and N1,030 in Abuja.
