There are signs that the Nigerian government’s committee set up to ensure the implementation of crude oil sales to local refineries in naira will discuss petrol pricing from the Dangote Refinery when it rolls out the product next month......See Full Story>>.....See Full Story>>
Reports quoted officials among oil marketers and implementation committee members on crude oil sales in naira, under the leadership of the Minister of Finance, Wale Edun, as saying that the panel would be holding meetings on petrol pricing from the $19 billion refinery in the coming days and weeks.
FG to decide to pay subsidy on Dangote petrol
They also reportedly said that the committee would conclude a framework benchmarking how much the plant would pay for crude in naira.
The Nigerian government would determine whether to pay subsidies for petrol from the facility to allow Nigerians to buy the product at the market price.
Punch reports that oil marketers stated that the cost of Dangote petrol would be more than the current prices of the commodity, and they said it would be challenging for dealers to buy the product from the facility if the Nigerian government does not intervene.
Petrol currently sells between N600 and N700 per litre, depending on the area of purchase across Nigeria.
Petrol landing cost hits N1,117 per litre
According to data from the Major Energies Marketers Association of Nigeria (MEMAN), the commodity’s landing cost was about N1,117 per litre.
Marketers disclosed that this is the actual price of the commodity and explained that the cost of petrol from the Dangote Refinery should be around that range.
The Nigerian National Petroleum Company Limited (NNPCL), the sole importer of the product, said the Nigerian government pays the differentials on petrol imports.
Legit.ng previously reported that NNPC’s Chief Financial Officer, Umar Ajiya, said the Nigerian government was paying a subsidy on petrol imports by NNPC.
Ajiya disclosed that the NNPC has been supplying PMS for distribution at about half the landing cost under an arrangement with the government.
NNPC admits FG offsets petrol costs
The NNPC CFO said the oil company has been offsetting the shortfall in landing cost and sale price via a reconciliation arrangement between the government and the firm, stressing that the company has not paid any marketer in the name of petrol subsidy.
The Nigerian government agreed on August 20, 2024, with the Dangote Refinery to roll out petrol in September.
The government also said crude oil sales to the refinery and others would commence on October 1, 2024.
According to reports, the Nigerian government is considering whether to pay subsidies on petrol from the refinery without burdening NNPC or allow Nigerians to buy the product from the refinery at the market price.
Dangote Refinery begins petrol production test run
Legit earlier reported that Dangote Refinery is reportedly conducting petrol test runs in anticipation of scheduled petrol production in September.
The facility is expected to release petrol into the Nigerian market in September after delays and deadline misses, which it blamed on crude oil supply challenges.
Reuters reports cited information from industry monitor IIR Energy.