Oil marketers in Nigeria forecast a potential drop in petrol prices to between N600 and N650 per liter as Dangote Refinery prepares to commence production. This follows delays and ongoing crude oil supply challenges.
Nigerian oil marketers have projected that the much-anticipated Dangote Refinery could significantly reduce petrol prices to between N600 and N650 per liter, depending on the cost of production once the facility becomes operational. This forecast comes despite ongoing challenges and delays in the refinery’s commencement of fuel production, initially expected in mid-August 2024.
Hammed Fashola, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), shared this insight in a statement on Monday. According to Fashola, the current petrol pricing landscape remains volatile, with the Nigerian National Petroleum Company Limited (NNPC) selling petrol at an official rate of N570 per liter, while private depots sell the product at much higher rates, sometimes exceeding N700 per liter.
Fashola emphasized that the introduction of fuel from the Dangote Refinery could bring much-needed relief to consumers, potentially lowering the pump price to around N600 or N650 per liter. However, he also cautioned that the final price will largely depend on the production costs incurred by the refinery.
“The official price from the NNPC is around N570/liter, but third-party private depots are selling PMS to most of our members at N700 and above,” Fashola noted. “If Dangote’s fuel enters the market, we hope the price will stabilize between N600 and N650 per liter. N600 is still reasonable, but it all hinges on the production costs at Dangote’s end.”
This development follows a week of tension between the Dangote Refinery and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) over a crude oil allocation dispute involving 26 million barrels. The ongoing crude oil supply crisis has been a significant hurdle for the Lagos-based refinery, further complicating its ability to meet its production targets.
The $20 billion refinery, once fully operational, is expected to play a pivotal role in reshaping Nigeria’s oil industry, reducing dependency on imported fuel, and potentially stabilizing domestic petrol prices. However, the exact timeline for when the refinery will start production remains uncertain.
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