It is no longer news that Nigeria reached a major milestone with the launch of the Dangote Refinery, allowing the country to produce its own petrol instead of importing it.

Consequently, Nigerians expected fuel prices to drop, which would help lower the rising costs of goods caused by the high price of petrol, but that has not been the case.

Recall that the first batch of PMS from the Dangote Refinery hit the market on Sunday as promised by the federal government.

However the smiles on Nigerians faces quickly wore off and their hope on the refinery for a reduced fuel price after recent increment of pump price was dashed with the price sold to the Nigerian National Petroleum Company Limited (NNPC Ltd).

Many Nigerians who had anticipated a lesser price compared to the present market price of between N855 and N950 were jolted when the NNPC Ltd released a price template for the stock received from the refinery.

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By implication, the price of Dangote PMS is over N100 costlier than the existing market price from NNPC retail stations and other major stations which has caused more fumes and complains by Nigerians.

Shedding light over the issues surrounding petrol price, an energy policy analyst, Yemi Adeoye while speaking on Friday at TVC Business News explained why PMS cannot be sold at lesser price by Dangote.

Adeoye explained that the NNPC is not the regulator of PMS if not an official announcement should have been made instead of Dangote’s instead NNPC is operating as a joint venture with Dangote like it is with every other international oil operating companies in Nigeria, which has come down to the relationship between Dangote Refinery and the NNPC. NNPC supplies Dangute crude oil, while the latter come back with refined PMS.

He also noted that the average price for gas everywhere in the world as well as U.S. is $3.33 in gallons, which amounts to N5,279 in Naira. He explained that a gallon is 4 liters and breaking it down per liter is N1,019.75, which Dangote would have been selling their PMS if allowed to function as a business entity. Therefore, the normal price should have been nothing less than N1,300 per liter without the regulation.

Explaining further, Adeoye said, “Nigeria produces crude oil but refining it requires several steps. First, crude oil must be extracted, which necessitates the use of an oil rig. The cheapest oil rig available costs around $100,000 to $150,000 per day. These factors, among others, contribute to the pricing of Premium Motor Spirit (PMS) because it is an international commodity.” while noting that Dangote would not have announced the price without the regulation of the NNPC.

Adeoye said the commitment of NNPC towards this is supplying crude oil to Dangote in naira instead of dollars which is fair.

“If Dangote should sell PMS as it should, it will be nothing less than N1300. The united state is the highest producer of crude oil with 32 refinaries and sells at N1,319 per liter talkless of Nigeria who owns just one refinary, he added.

Finally, Adeoye said PMS hike is a global phenomenal and it is affecting everything.

By Yemie Adeoye

Nigeria’s national oil company, The NNPC Limited has announced new prices of Premium Motor Spirit (PMS), also known as Petrol accross its retail stations in Nigeria with Lagos retaining the lowest price of N950.22k a liter and Borno state retaining the highest price of N1,019.22k a liter.

Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Limited Mele Kyari

In a chart made available to Biztellers.com.ng and signed by Olufemi Soneye, spokesman of the national oil company, it was gathered that the North Central especially the FTC will be paying the sum of N992.22k for a liter of petrol, while the Northwest region will be paying N999.22. In the South South and the South East regions beginning with Rivers and Imo states, the price of PMS will be N980.22k.

The NNPC in its released estimated prices of Petrol (obtained from the Dangote Refinery)stated further that the NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by Government, but negotiated directly between parties on an arms length.

“The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1st, 2024.

The NNPC Ltd assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100% to the general public.

Attached to this statement are the estimated pump prices of PMS (obtained from the Dangote Refinery) across NNPC Retail Stations in the country, based on September 2024 pricing”. the statement further enthused.

Yemie ADEOYE

AS part of the energy security of the federal government initiative the Nigerian National Petroleum Company Limited (NNPCL) will begin supplying 385,000 barrels per day (BPD), representing 60 percent of daily crude oil supply to the 650,000 bpd capacity Dangote Refinery starting October 1, 2024.

Payment for these supplies will be made in Naira, a move expected to significantly boost domestic energy production. In exchange, the Dangote Refinery will supply Premium Motor Spirit (PMS) and diesel of equal value to the domestic market, also to be paid for in Naira.

Group Chief Executive Officer of Nigerian National Petroleum Corporation (NNPC) Limited Mele Kyari

The sale of diesel will be open to any interested offtaker, while PMS will initially be sold exclusively to NNPC for distribution to local marketers.

The Minister also emphasized that all associated regulatory costs from agencies like the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) would be paid in Naira.

In preparation for smooth implementation, a one-stop service center will be established in Lagos to coordinate the activities of regulatory and security agencies involved in the project just as the Federal Government has initiated the sale of crude oil to local refineries and the purchase of petroleum products entirely in Naira.

This landmark policy is aimed at reducing pressure on the national currency, cutting transaction costs, and ensuring a steady supply of petroleum products across the country.

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The Honourable Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced the commencement of the initiative at a press briefing in Abuja, following a meeting of the Technical Sub-Committee on the sale of crude to local refineries.

Represented by Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), the Minister revealed that all agreements and frameworks for the project’s rollout had been finalized.

“Under the leadership of Mr. President, the Federal Executive Council (FEC) approved this bold initiative, which allows crude oil to be sold to refineries in Naira, while petroleum products will also be purchased in Naira,” the Minister stated.

“This will alleviate pressure on the Naira, reduce unnecessary transaction costs, and improve the availability of fuel products across the nation.”

“This initiative marks a significant milestone in our journey toward energy self-sufficiency. We are grateful for the hard work and patriotism exhibited by all involved over the past few weeks. Mr. President has championed this vision, and we are fully committed to its successful implementation,” Mr. Edun concluded.

This groundbreaking move is expected to enhance Nigeria’s energy independence, fortify its economy, and serve as a blueprint for future initiatives aimed at promoting local industries and reducing foreign exchange burdens.