Oil marketers have declared that the Dangote Petroleum Refinery and others in Nigeria may raise the pump price of petrol to N1,500 per litre once there is an outright ban on fuel importation.
While the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Udadike, affirmed this, the Petroleum Products Retail Outlet Owners Association of Nigeria said PETROAN could not predict any price, but stressed that there will be a surge in price if the Federal Government stops fuel importation.
However, officials of the Dangote refinery dismissed the projection, saying the marketers made the claims to justify their intention to continue importing “substandard” fuel.
The PUNCH reports that the marketers spoke amid concerns that President Bola Tinubu might ban fuel importation as part of his ‘Nigeria First Policy’, which ordered government agencies to stop the importation of products that can be produced locally.
With the 650,000 barrels per day Dangote refinery and other modular refineries coming on stream, there are speculations that the Federal Government might end fuel importation, which is now about 14.7 million litres per day.
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Also, the fact that the Dangote refinery dragged the Nigerian Midstream and Downstream Petroleum Regulatory Authority to court, alongside other players in the industry, is a source of concern to importers, depot owners, and marketers.
As a result, the stakeholders voiced out, saying the Dangote refinery does not have the capacity to meet local demand. But Dangote refuted the claim, saying it has enough to satisfy local consumption and export to other countries.
Speaking in an interview with our correspondent, Ukadike argued that importation is necessary to check the local refiners and prevent profiteering. The IPMAN spokesperson argued that even the modular refineries producing diesel still sell at prices higher than the prices offered by the importers.
According to Ukadike, the rumour that Tinubu may ban fuel imports was not welcomed by IPMAN, asking the President not to consider such a move.
He noted that importers were the only hope of the nation at a time when there were no functioning refineries in the country, saying it was pertinent to allow them to continue their businesses to check domestic fuel prices.
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Ukadike warned that refiners might resort to extortion if there are no alternatives from other sources.
“Importation has been long there, and it has been sustaining us. Now that we have the Dangote refinery that has been producing petroleum products and the NNPC that has been struggling to see whether they can produce one keg of petrol for this country, it is also pertinent to allow importation to check the domestic prices of fuel in this country.
“We won’t want refiners to start extorting Nigerians because there are no more imports. Sometimes, import helps to regulate the prices of petroleum products. You will also agree with me that the modular refineries producing diesel are not selling it cheaper than the imported one. I will appeal to Mr President to allow the importation of petroleum products,” he explained.
Ukadike said fuel importers will stop importing once they notice that the local price is lower than the cost of imported fuel.
“It is the factor of price that will ban importation. If the prices of local fuel are cheap, the marketers will buy, and importers will ban themselves from importing. Allow the importers to look at the indices of the market and see when local refineries are becoming exploitative. Once you ban them from importing, Dangote will raise its PMS to N1,500, and this is not good for Nigerians,” he stated.
Instead of banning importation, Ukadike urged the government to support local refiners with financing, tax waivers, reduction in interest rates, and other incentives that could make them exporters of petroleum products.
“We, the independent marketers, don’t encourage the banning of petroleum products imports. Let the government give aid and support to our local refineries and manufacturers. Look at the taxes, look at the bank charges to ensure their prices are good for export, not only for internal consumption. The government can give a mandate to local refineries to export petroleum products after meeting domestic consumption,” he noted.
PETROAN agrees
Meanwhile, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, agreed with IPMAN that petrol prices could surge without importation, saying the current price reductions by the refinery were artificial.
While saying PETROAN would not speculate on any price, Gillis-Harry warned that the country should not allow only one source of securing its energy needs.
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According to him, banning fuel importation is against the Petroleum Industry Act, which created an open market for all players.
“There will be price surges if fuel importation is banned. Even these price reductions, as far as we are concerned, are artificial. And if there are no empirical values to give us any clear-cut financial engineering that will give us the prices we see in the market, it means something is wrong and something will be wrong in the future, too.
“So, the authorities need to do quite a lot. The Federal Competition and Consumer Protection Commission should also do quite a lot to check everything and make sure that the industry is stable,” he said.
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