Drop in price of petroleum products expected with Dangote Refinery becoming operational

Agency report

Following the commencement of operations at the Dangote Refinery, oil marketers have reacted to an imminent price reduction of fuel products.

DAILY POST reports that the Dangote refinery announced the commencement of production last Friday.

The company said it awaits the Federal Government’s approval to supply diesel and JetA1 or aviation fuel across the domestic market.

Reacting to the development, President of Petroleum Products Retail Outlets Owners Association, PETROAN, Billy Gillis-Harry, has said the coming onstream of the Dangote refinery means the cost of refined products would be impacted positively.

“However, the fact that the crude oil being used is the one for domestic consumption takes away the cost of freight and insurance from the total cost. So, if that has been removed, there is a likelihood that prices will be impacted positively to the benefit of Nigerians.

“But what exactly will be the price is to be awaited and worked out because, for instance, we don’t know how much he received the crude oil, whether it is in naira or dollar, and that is business information that sometimes is difficult to release.”

“Regardless of the situation, we should still expect a reprieve; some advantages should come to us. So that is my thinking”.

Also, the President of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Abubakar Maigandi, hinted that as soon as its members commence loading the Dangote refinery’s petroleum products, the price will be determined.

“It is when we start loading that he can give us the price, and then we will know how much to sell”, Maigandi stated.

“Immediately he starts releasing products, we are assured of the availability of products, and there will be no more scarcity, provided that he is producing. Also, it will create employment opportunities.”

Meanwhile, Executive Secretary/Chief Executive Officer, Major Oil Marketers Association of Nigeria, MOMAN, Clement Isong, said, “I’ve heard some people say there will be savings in freight; that might be true. But that is a tiny part of the cost. The major part of the cost is the raw material, which is the crude oil; even the refining cost is quite small. I don’t expect a significant price drop, definitely not N400; that’s very unlikely, in my opinion.”

Source: Dailypost