Oil marketers have expressed reservations about the pricing strategy of the Nigerian National Petroleum Company Limited (NNPCL), raising concerns about the competitiveness of products from the newly rehabilitated Port Harcourt Refinery. The marketers have made it clear that they would only patronize the refinery if its prices are significantly lower than those offered by the Dangote Refinery or imported fuel.
The Port Harcourt Refinery, which resumed operations on Tuesday after years of inactivity, has a daily refining capacity of 70 percent of its installed potential. Despite this, the state-owned refinery has not yet released prices for its products, leading to discontent among marketers.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized that NNPC’s pricing would be a deciding factor for marketers. “The last price from NNPC was N1,040 to N1,045 per litre, compared to Dangote’s N970. For marketers, the decision is simple: we will only buy from NNPC if it is cheaper,” Ukadike stated.
He acknowledged the global decline in fuel prices and expressed hope that NNPC would review its pricing to remain competitive. “We expect a price review soon. Once that happens, we will assess if it’s better than Dangote’s offer.”
Discrepancy in current pricing
NNPCL has yet to commence bulk sales of products from the Port Harcourt Refinery, according to its spokesperson Olufemi Soneye. Current stock, sourced from the Dangote Refinery, is being sold at N1,045 per litre at NNPCL retail stations. This price is higher than Dangote’s direct offer to marketers, which recently dropped from N990 to N970 per litre for bulk purchases of two million litres or more.
Joseph Obele, the National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), highlighted that NNPC’s pricing is still N75 higher than Dangote’s, further discouraging marketers from patronizing the state-owned oil company.
Importation resumes amid pricing concerns
Meanwhile, oil marketers have turned to fuel importation to meet demand, citing unfavorable domestic pricing. Between November 23 and November 28, 105.67 million litres of petrol were imported into the country, reflecting the industry’s reluctance to rely solely on local refineries.
Documents from the Nigerian Ports Authority revealed that four vessels carrying a total of 78,800 metric tonnes of petrol arrived at Lagos and Calabar ports during the period.
Despite the initial praise for the refinery’s rehabilitation, marketers are urging NNPC to prioritize competitive pricing to make locally refined products more attractive. PETROAN President Billy Gillis-Harry acknowledged the refinery’s potential but noted that the association’s members are still operating under outdated pricing structures and awaiting revised rates from NNPC.
“The production at Port Harcourt is a welcome development, but competitive pricing is key to ensuring its success in the market,” he said.
In response to these concerns, NNPC has assured that it is finalizing pricing strategies and administrative processes. The company remains optimistic about fostering partnerships with marketers to enhance domestic fuel distribution.
However, the pricing disparity has sparked a debate over the profitability of local refineries. Marketers have indicated that they might continue importing fuel if domestic prices remain uncompetitive, potentially undermining the benefits of local production.
The situation underscores the need for strategic pricing policies to bridge the gap between domestic and imported fuel costs, ensuring that local refineries, including Port Harcourt, can thrive in the competitive energy market.
