Why Does Dangote Petrol Cost More Than Imported Fuel?

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised concerns about the pricing of petrol from the newly operational Dangote Refinery, as managed by the Nigerian National Petroleum Company Limited (NNPCL). IPMAN finds it unreasonable for the NNPCL to charge more for locally refined petrol compared to fuel that’s imported.

John Kekeocha, IPMAN National Welfare Officer, expressed his bewilderment on Monday, questioning the logic behind such pricing strategies: “If NNPC can sell Dangote products higher than the imported products, then it doesn’t make sense. What is the celebration we are having all these while then?”

Dangote Refinery Responds

This issue came to light as NNPCL began distributing its first batch of petrol sourced from the Dangote Refinery on Sunday. The NNPCL claimed to have purchased petrol at N898 per litre from the private refinery.

Before this, petrol was selling for about N855 per litre at NNPCL retail outlets in Lagos. However, after starting to distribute Dangote petrol, the price rose to N950 per litre in Lagos and N1,019 in Borno.

Dangote Refinery denied selling petrol to the NNPCL at N898 per litre. Anthony Chiejina, a spokesperson for the refinery, labelled the NNPCL’s claims as “misleading and mischievous.” Chiejina pointed out that the refinery sold the products in dollars, which should result in considerable savings compared to the costs of imported fuel.

He emphasised the advantages of this setup, stating, “With this action, there will be petrol available in every local government area of the country, regardless of their remote nature.”

Despite the refinery’s denial, the NNPCL maintained its stance that it purchased petrol at N898 per litre and challenged Dangote Refinery to disclose the prices at which it sold the petrol. The NNPCL also provided a detailed breakdown of its pricing for Dangote petrol across its stations nationwide.

As the Dangote refinery increases its supply of diesel, aviation fuel, and now petrol to marketers throughout Nigeria, the ongoing debate over pricing sheds light on the complex dynamics of fuel supply and economic policy in the country.