Oil marketers are unable to import or purchase petrol from the Dangote refinery as the venture is no longer profitable or cost-effective, according to the Nigerian National Petroleum Company (NNPC) Limited.
Adedapo Segun, NNPC’s Executive Vice President for Downstream, stated on Monday that no marketer is being prevented from importing petrol.
He added that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) continues to approve import permits for marketers.
“When the marketers go to NNPC to get the permit or licence to get the import, typically they will say they want to import x amount of automotive gas oil (AGO), aviation turbine kerosene (ATK), and some of them actually include petroleum motor spirit (PMS),” he said.
“They then go to market, check the market indices and say to themselves: PMS is still being sold below cost; if I bring it in, I’ll make a loss.
“Now they have approval to bring in ATK, AGO, and PMS, but they end up bringing only AGO and ATK.
“They do not bring in that PMS because the market is still not right for them. So, it is not because NNPC wants to be the sole importer or provider of PMS, it is because the other marketers won’t do it if it’s not profitable.”
The NNPC executive said marketers cannot purchase petrol directly from refinery because the product is still sold at a subsidised rate.
“That is the same thing happening with Dangote. I said earlier that Dangote is a company and it is going to sell at market price,” he said.
“The market value of PMS is still higher than what than the N766 or N765 or N799 that NNPC is selling.
“So, there is no way the marketers would bring it in. There’s no way the marketers would also buy from Dangote.
“Basically, the situation has not changed there. So, NNPC offtaking is only because the others would not buy at the price Dangote will be willing to sell, which is reasonable.
“As soon as the price allows for it, you will see the marketers go to Dangote and buy.
“So, instead of saying NNPC is the only offtaker, let’s put it this way: NNPC is the only entity that is willing to offtake because NNPC has a role under law to be the energy provider of the resort.”
Segun explained that this is not out of a desire to exclude other marketers “and you see that play out in the fact that NNPC is going to supply crude to Dangote and collect naira”.
Segun added that every other marketer can buy the product as soon as petrol prices are cost-reflective.
NNPC commenced petrol lifting at the refinery’s gantry on September 15, after an extended period of price negotiations.
