N1,100/litre: Expert Exposes Petrol Pricing Calculations Fraud in Nigeria, Defends Dangote Refinery
- An industry expert has criticized the quoted prices for petrol landing costs in Nigeria, describing them as fraudulent in defence of the Dangote Refinery
- The expert said marketers should have no reason to keep importing petrol when a local refinery produces more than enough
- The cost of petrol has been a burden to Nigerians over the past year, with average pump prices now above N1,1000
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
An energy sector expert, Kelvin Emmanuel, has described current petrol pricing calculations in Nigeria as fraudulent.
According to him, the process for arriving at the landing cost figures quoted by the Nigerian National Petroleum Company Limited (NNPCL) and oil marketers importing petrol is shrouded in secrecy because of the sharp practices.
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Speaking in an interview, the expert alleged that arbitrage opportunities are one of the reasons petrol imports continue despite the Dangote Refinery's capacity to deliver the fuel Nigeria needs.
He said:
"The structure for calculating the petrol landing price in Nigeria is fraudulent; they keep importing because the arbitrage opportunities benefit them.
"They know that if they begin sourcing from the Dangote Refinery, they won’t make as much as they used to compared to importing PMS. This is why they are complaining."
Kelvin noted that Dangote has enough to meet marketers' demands and wondered why they are not buying yet when the refinery is in Lagos.
He added:
"The Dangote Refinery has 500 million litres of PMS stored in Lagos—so why aren’t they taking the product?
"Last week, 79 million litres were shipped from the Lekki Refinery to Apapa, and marketers have taken a little over 200 million litres in the last month alone. The Dangote Refinery has enough supply and is producing 32 million litres daily, making it more profitable to buy locally.
"However, the price from Dangote is cheaper than the landing price they quoted for imported petrol.
"At a landing price of over N1,100 per litre, they were collecting under-recovery payments from the government, which is why the NNPC has not been able to remit funds to the government."
He called on the marketers to go to the refinery and discuss this with Dangote.
"I don't know why IPMAN is still going to the NNPC inventory system to buy from the Dangote Refinery. I am surprised that the marketers keep saying they can't get petrol.
"The Dangote Refinery is in Lagos; they should go there and discuss a commercial framework for purchasing fuel.
"If Ghana has indicated interest in taking products from the refinery, why is IPMAN struggling to do the same? Then, it is not the Dangote Refinery's fault. Something is wrong somewhere."
Again, filling stations adjust fuel prices as marketers
Earlier, Legit.ng reported a new fuel price at filling stations as marketers prepare to load petrol products from the refinery.
The deregulated petroleum market means market forces will now determine the pump price.
Motorists have shared their experiences buying at the new prices at filling stations.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
