The Cis producing Premium Motor Spirit (PMS), and consumers and industry stakeholders are taking notice due to the persistent fuel shortage.
The Nigerian National Petroleum Corporation (NNPC) Limited has repeatedly said that distribution issues have been fixed; nonetheless, long lines and a shortage of fuel persist in important districts of Lagos, Ogun, and Abuja.
Commercial drivers and private vehicle owners must wait in huge queues at the few gas stations that are still open because many of them are still closed.
The battle for fuel has intensified in Ikeja, Maryland, Ikorodu, and other sections of Lagos as the price of gasoline has skyrocketed to as much as N1,000 per litre.
This alarming pattern is also seen in Ogun State and even in Abuja, the capital of the country.
“Paying N1,000 per litre now feels like the new normal amid this scarcity—if you’re lucky enough to find any,” an unhappy driver told The News Chronicles.
The necessity for Dangote Refinery to start producing petroleum immediately has been further underscored by the NNPC’s inability to end this ongoing issue.
As former NERC Chairman and industry analyst Sam Amadi noted, “The core issue is supply. The hope is that when the Dangote Refinery is open, it will finally alleviate the supply constraints.”
Experts have mixed opinions as the Dangote Refinery sets a September date
In addition, industry players are preparing for the anticipated September start of Dangote Refinery’s gasoline production, which might provide the much-needed respite from the dilemma of lengthy lineups and skyrocketing gas prices.
As previously reported by the News Chronicles, Dangote Refinery is aiming for a September start date following several delays brought on by technical problems and a shortage of supplies from international oil companies (IOCs) as well as the NNPC.
Dangote Refinery is viewed by many industry participants and analysts as the possible magic bullet that could ultimately end the ongoing fuel shortage issue.
Regarding how much Dangote will charge for petrol in light of the unstable market and other affecting variables, opinions are divided.
Energy specialist and senior partner at Bloomfield Law Ayodele Oni voiced cautious optimism over the refinery’s 650,000 barrels per day influence on PMS prices.
He claims that the Dangote Refinery will alleviate the logistics issues now plaguing the petroleum sector. He also noted that, notwithstanding other current market realities, the decrease in the cost of PMS imports would result in a reduction of the items.
“Refining within Nigeria may result in some adjustments in fuel cost. This is because reducing logistical expenses, which eliminates the need for huge vessels to deliver items, may help cut PMS prices.
“It’s crucial to remember, though, that the global crude oil market has a big impact on PMS pricing,” Maxwell informed TNC.
In his opinion, Amadi stated that although the Dangote refinery may be able to address the supply problems that are generating the fuel shortage, he does not believe this would lead to a major drop in petrol prices in the upcoming months.
He noted that while the nation may trust Dangote to offer better prices, they could be beaten by prices on the global market.
“Supply will rise if Dangote refinery eventually starts to produce. Generally speaking, a rise in supply lowers prices, but the price difference we can experience after Dangote would rely on its own price.”
“Dangote claims that it will be sold at the price set by the global market. Given that he needs to be competitive, this makes sense. Therefore, the size of the linked import cost may account for the price discrepancy. Depending on the cost of import, we have some better prices from Dangote,” Amadi stated.
“The price of petrol has not yet been fixed.”
The refinery’s management issued a statement last month refuting marketer rumors that the facility will set its prices at N600 per litre. The statement stated that the refinery has not set a price for its goods.
Anthony Chiejina, a spokesman for the Dangote Group, stated that the refinery’s perspective is not represented by the conjecture of the marketers.
“We have noticed headlines in Punch Newspapers on Tuesday, August 13, 2024, announcing the launch of Marketers Project N600/litre for Dangote Petrol.
“We would like to clarify that the Independent Petroleum Marketers Association of Nigeria (IPMAN) is not our business partner yet.”
“We have never discussed the price of Premium Motor Spirit (PMS) with them, and they have no mandate or authority to speak for us, either for good or with hidden transcript.”
“We implore the public to refrain from making such wild claims. We communicate our opinions to our stakeholders through our formal channels,” Chiejina stated.
Industry observers predict that Dangote will likely announce its fuel pricing using a similar strategy to that of releasing the diesel price when it begins distribution this month.
