Bewilderment yesterday trailed the release of retail pricing template of the Dangote Refinery Petrol by the Nigerian National Petroleum Company Limited (NNPCL).
The price template indicates an average price per litre of N950.22 for Lagos State, NNPCL’s shortest route, and N1,019.22 per litre for Borno State, the highest and extreme end of the supply route.
Before yesterday, petrol was sold at NNPCL outlets in Lagos for N855 per litre and Borno State for N924 per litre.
The new pricing template did not take off in NNPCL and major marketers’ filling stations in Lagos. They were apparently still selling the old stock.
But while some private operators immediately adjusted their prices, other started collecting additional N500 per vehicle but sold the product at the old price.
However, many independent marketers shut their gates to the public following the release of NNPCL’s new pricing template, creating a sense of panic and flash artificial scarcity.
In Abuja, The Nation observed that both NNPCL and independent marketers retained their existing prices: NNPCL still sells at N897 per litre. But there were queues around the retail outlets as a result of scarcity of the product.
NNPCL had said it paid $120 million to Dangote Refinery for supply of 25 million litres, which the oil giant calculated to be the plant cost of N898 per litre, N43 above NNPCL’s base retail price of N855 per litre.
Dangote released 16.3 million litres, a shortfall of 8.7 million litres. But in a statement on Sunday, Dangote said the insinuated plant cost per litre of N898 was “misleading and mischievous”.
NNPCL’s Chief Corporate Communications Officer Olufemi Soneye yesterday said the new price template reflected the provisions of the Petroleum Industry Act (PIA) 2021, under which petrol prices are negotiated by parties “on an arm’s-length” rather than by government’s fiat.
According to him, the estimated prices are based on negotiated terms between NNPCL and Dangote Refinery, which recognise the current international petrol prices and the prevailing foreign exchange rate in line with the provisions of the PIA (2021).
“The NNPC Ltd is paying Dangote Refinery in USD for September 2024 PMS offtake, as naira transactions will only commence on October 1, 2024,” Soneye said.
The spokesman noted that where there is any discount from Dangote Refinery, NNPCL would pass on such discount 100 per cent to the public.
He added: “The NNPC Limited can confirm that it is paying Dangote Refinery in United States dollar (USD) for September 2024 PMS off-take, as naira transactions will only commence on October 1, 2024.
“The NNPC Limited assures that if the quoted pricing is disputed, it will be grateful for any discount from Dangote Refinery, which will be passed on 100 per cent to the general public.”
A perusal of the template indicated that in arriving at the pricing, factors the NNPCL took into consideration include the mandatory NMDPRA levy of N4.495 per litre, the Midstream and Gas Infrastructure Fund (MDGIF) of N4.495, and the Distribution and Logistics cost of N42.45.
Also, from the template released, using the Platts10ppm benchmark while the price of petrol per metric tonne (MT) from Platts10ppm as at weekend stood at $690; the price per metric tonne from Dangote Refinery PMS Gantry pricing yesterday was $736 per metric tonne, making it $46 higher than that from Platts10ppm.
On litre-by-litre basis, petrol from Platts10ppm sold at $0.52 while it sold at $0.55 from Dangote Refinery, representing a $0.3 difference between the two.
Breaking the price differential further down, the NNPCL template further indicated that from the Platts10ppm, petrol is bought at N842.61 per litre, compared to the N898 per litre it was purchased from Dangote Refinery yesterday.
Platts means a price benchmark service for the oil industry. Platts pricing plus a premium or minus a discount is the preferred pricing mechanism on this requirement.
Platts benchmark prices are widely used in the fuel industry as a reference point for pricing physical and financial contracts. For example, if a fuel buyer is looking to purchase a shipment of oil, they may reference Platts benchmark price for that type of oil as a starting point for negotiations with the seller.
Members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) yesterday said they were on the lookout for an official notification on the pricing for Dangote petrol.
IPMAN’s National President Abubakar Maigandi said members of the union were awaiting NNPCL’s response for the official communication on the pricing.
IPMAN National Welfare Officer, John Kekeocha, said it did not make sense for the NNPCL to sell petrol lifted from the Dangote Refinery higher than imported ones.
Nation