The Nigerian National Petroleum Company (NNPC) Limited says oil marketers cannot import or buy petrol from Dangote refinery because the business is not profitable and cost-reflective.
Speaking to journalists on Monday, Adedapo Segun, executive vice-president, downstream at NNPC, said no one has precluded any marketer from importing petrol.
He said the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has been approving import permits.
“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. 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.
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“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.”
This, Segun said, said 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 said as soon as petrol prices are cost-reflective, every other marketer can buy the product.
On September 15, the NNPC commenced petrol lifting at the refinery’s gantry after an extended period of price negotiations.
