In a surprising turn of events, oil marketers are considering importing Premium Motor Spirit (PMS), also known as petrol, following the Nigerian National Petroleum Company Limited’s (NNPC) declaration that it would only fully offtake the product from the Dangote Petroleum Refinery if market prices are higher than pump prices in Nigeria.
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NNPC’s stance has left marketers scrambling to explore alternative sources of petrol, with some considering imports if it proves cheaper than purchasing from Dangote Refinery. “We have not contacted Dangote for now, but we may contact the refinery’s sales department this week to find out the price,” said Mustapha Zarma, National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN). “If the price is competitive enough for one to buy and get his return on investment and the required margin, then we wouldn’t mind purchasing directly from him to complement what NNPC is bringing in or what NNPC would buy from Dangote.”
Industry observers say the Federal Government’s reluctance to stop fuel importation has contributed to the standoff between NNPC and Dangote Refinery. “The government seems not ready to stop fuel importation following the refusal of NNPC to be the off-taker of Dangote’s petrol,” said an industry source.
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The development has raised questions about the government’s commitment to promoting local refining and reducing fuel importation. The Dangote Refinery has the capacity to produce 650,000 barrels of petrol per day, but NNPC’s refusal to guarantee offtake may hinder the refinery’s ability to supply the product locally.
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