PENGASSAN: NNPCL Subsidy Hinders Independent Marketers from Buying Directly from Dangote Refinery
By Okafor Joseph Afam
September 25, 2024
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has disclosed that the Nigerian National Petroleum Company Limited (NNPCL) has been providing fuel to independent marketers at subsidized rates, making it challenging for them to purchase directly from the Dangote Refinery.
During a press conference in Lagos State on Tuesday, PENGASSAN President, Festas Osifo, addressed the issue of fuel procurement and pricing. He explained that there is a significant disparity between the price at which the NNPCL buys Premium Motor Spirit (PMS) and the price it sells to independent marketers, which complicates the process for independent marketers seeking to source fuel from the Dangote Refinery.
Osifo stated that there have been instances where the NNPCL purchased PMS at approximately N950 per litre but sold it to marketers at around N700. This subsidy, Osifo argued, is what allows independent marketers to buy from the NNPCL at a lower rate, helping to stabilize prices in the local market. On the other hand, major marketers purchasing directly from the Dangote Refinery would have to sell at a higher price, potentially exceeding N1000 per litre, due to the lack of a subsidy.
“Independent marketers are more inclined to buy from NNPCL due to these lower prices,” Osifo said, emphasizing the challenges posed by the pricing disparity. The situation has led to a reliance on NNPCL for fuel supply as opposed to buying directly from the Dangote Refinery, which has not benefitted from the same subsidies.
The pricing issue has also raised concerns over transparency regarding how much the NNPCL pays Dangote Refinery for refined petroleum products. Ongoing disagreements between both parties about the actual cost of lifting refined petroleum have only added to the uncertainty surrounding the deal.
Osifo’s remarks highlight the complexities of Nigeria’s petroleum market and the difficulties independent marketers face in navigating pricing policies that are influenced by subsidies and procurement practices.
