Major petroleum marketers in Nigeria have said that they will no longer import petrol after the Dangote Refinery’s increased output significantly increased local supply.
Marketers have purchased 148 million litres of gasoline from the new refinery in the last ten weeks, significantly changing the dynamics of the nation’s fuel supply.
According to the Major Energies Marketers Association of Nigeria (MEMAN), despite having licenses to import the product, its members have recently depended on the Dangote refinery for their gasoline supply.
Clement Isong, the CEO of MEMAN, revealed this yesterday at a quarterly webinar hosted by the Association for Energy Reporters.
According to Isong, between September 16 and November 24, 2024, MEMAN members procured 148 million litres of petrol from the $20 billion Dangote refinery in Lagos, an average of two million gallons per day.
Presently, the key marketers, 11 Plc., Ardova Plc., Conoil, MRS, Nigerian National Petroleum Company Limited (NNPCL), and TotalEnergies, hold between 40 and 50 percent of Nigeria’s petroleum products market share.
Ogechi Nkwoji, MEMAN’s Head of Economic Intelligence, Research, and Regulation, attended the discussion on Isong’s behalf.
Speaking on “Fuel Pricing,” the CEO of MEMAN clarified that although association members were authorized to import petrol, they had recently depended on local supplies from the Dangote refinery because of the established competitive market structure.
He claimed that goods removed from the Dangote refinery were delivered to marketers’ facilities in Lagos by trucks and ships, demonstrating the supply chain’s operational flexibility.
MEMAN members loaded 29,468,333 liters in Week 38 (September 16–22, 2024), followed by 20,843,322 liters in Week 39, and 27,236,283 liters in Week 40, according to Isong, who provided a thorough analysis of quantities lifted over ten weeks.
But in the following weeks, he claimed, “volumes started to decline, reaching a low of 1,600,000 litres in Week 46.”
“The supply slightly rebounded to 11,596,397 litres by Week 47 (November 18-24, 2024).”
Isong disclosed that a federal government directive issued through the Ministry of Finance caused the development. It ended NNPCL’s intermediary role and allowed independent petroleum marketers to negotiate and buy petrol directly from nearby refineries, promoting efficiency and competition.
He said that the spot price of gasoline was N976.07 per litre, based on a 30-day pricing trend from October 10 to November 22, 2024. The average price per litre during that time was N971.14.
Isong insisted that, using a foreign exchange rate of N1,665.99 to the dollar, the estimated product cost per metric tonne was N708,390.
Isong clarified that the jetty location, such as ASPM, and a standard product amount benchmarked at 38,000 metric tonnes were important cost components that affect petrol prices in Nigeria.
“The pricing methodology is based on an average premium and the Argus Gasoline Euro-Bob benchmark for deliveries in West Africa,” he said.
“The final price is greatly influenced by the exchange rate, which is derived from the Central Bank of Nigeria’s (CBN) weighted average rate within the Nigerian Foreign Exchange Market (NFEM).”
Isong said that finance costs, estimated to be 32% annually over a 30-day period, significantly impacted the cost structure.
He said ship-to-ship (STS) freight expenses and associated fees represented a 10-day delivery window to the ASPM jetty, Lagos Midstream Jetty (LMJ), situated in the Lagos Apapa Harbour.
“Other local charges include those imposed by the Nigerian Ports Authority (NPA) for services, such as towage, berthage, and cargo handling, as well as contributions to NIMASA at two percent of local freight and regulatory fees from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which add a combined one percent levy,” Isong told reporters.
