Dangote Refinery petrol priced at N970 per litre; marketers urge shift to naira-based charges
Crude oil refiners and downstream sector operators in Nigeria have attributed the high cost of locally refined Premium Motor Spirit (PMS), commonly called petrol, to dollar-based charges and crude importation costs.
Data from the Major Energies Marketers Association of Nigeria (MEMAN) as of December 5, 2024, shows that the landing cost of imported PMS is N958.89 per litre. Meanwhile, petrol from the Dangote Petroleum Refinery is priced at N970 per litre, and the Port Harcourt Refining Company produces at an even higher cost of N1,030 per litre.
Industry players blame dollar-denominated charges by government agencies, such as jetty fees and pipeline tariffs, for inflating the prices of locally refined fuel.
Dollar Charges and Industry Concerns
The Crude Oil Refinery Owners Association of Nigeria (CORAN) has expressed frustration over continued dollar-based charges for domestically consumed fuel. CORAN’s Publicity Secretary, Eche Idoko, highlighted jetty fees as a major challenge, calling on the government to transition to naira-based fees.
“Charging in dollars for locally consumed commodities remains a significant barrier for businesses in the downstream sector. It’s a critical issue that must be addressed to lower the cost of petrol,” Idoko stated.
The Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) have historically set charges in dollars. In March, MEMAN raised similar concerns, pointing out that such fees, approximately $10 per metric tonne, drive up pump prices under the prevailing exchange rate.
Presidential Directive on Local Charges
According to the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ukadike Chinedu, President Bola Tinubu has directed that crude oil sold to local refineries, including Dangote’s, be priced in naira.
“The President has ordered crude sales in naira, and all agencies must align with this directive to ensure local pricing benefits Nigerians. Jetty and vessel charges may still be denominated in dollars, but this needs urgent review,” Ukadike said.
NIMASA confirmed ongoing efforts to transition its charges to naira, with officials stating that discussions are underway to address the concerns raised by Dangote and other operators.
Importation of Crude and Other Factors
Another issue contributing to the high cost of locally refined PMS is the need to import crude. Industry insiders note that fluctuating exchange rates and crude prices significantly impact the final cost of refining.
“If crude is imported at $80 per barrel when the exchange rate is N1,600/$, the costs are locked in until the stock is depleted. This complexity explains why pump prices don’t immediately drop when crude costs decline,” a major oil marketer explained.
Freedom of Choice for Marketers
To navigate these challenges, oil marketers emphasize the need for flexibility in sourcing fuel.
“Marketers should have the freedom to choose between local and imported petrol, depending on which option offers the best value. This flexibility ensures we can meet our financial obligations and deliver returns to shareholders,” the dealer added.
