Oil marketers have reacted to an imminent price reduction of fuel products, as a result of the commencement of operations at the Dangote Refinery.
Recall that Dangote refinery had announced the commencement of production last Friday.
The company hinted that it is waiting for the Federal Government to approve the supply of diesel and JetA1 or aviation fuel across the domestic market.
In his reaction to the development, the President of Petroleum Products Retail Outlets Owners Association, PETROAN, Billy Gillis-Harry stated that the commencement of Dangote refinery operations will have a positive impact on the cost of refined products.
“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”.
Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), also reacting, revealed that the price of petroleum products from the Dangote refinery will be determined once IPMAN members begin loading the products.
“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.”