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Dangote Petrol Could Sell At ₦600/Ltr If… – Experts Reveal

Published

2 months ago

Sep 22, 2024.

Experts in the petroleum industry have proposed that with effective government intervention, petrol from the Dangote Refinery could be sold for less than ₦600 per litre.

The Crude Oil Refiners Association of Nigeria (CORAN) expressed optimism that local refineries, including Dangote’s, could reduce fuel costs if proper measures are implemented.

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EKO HOT BLOG reports that Eche Idoko, CORAN’s Publicity Secretary, explained that the ₦898 per litre price quoted by the Nigerian National Petroleum Company (NNPC) for petrol from Dangote’s refinery is driven by the high exchange rate.

He suggested that if the exchange rate is capped at ₦1,000 to the dollar for locally-produced petroleum, the price could drop to ₦550 per litre.

Idoko clarified that the petrol currently being sold by Dangote was refined from crude purchased in June, with 60% supplied by NNPC and the rest imported by Dangote at international prices.

Even at ₦898 per litre, NNPC is paying ₦300 less than the landing cost of nearly ₦1,200 per litre for imported petrol. Local refining, he argued, could eliminate this ₦300/litre margin without further intervention.

To further reduce petrol prices, Idoko recommended that the Federal Government sell crude to local refineries in naira and peg the exchange rate for these transactions at ₦1,000 to the dollar.

This approach, he argued, would significantly lower the pump price.

Dangote Fuel Experts

Addressing concerns about monopolistic practices, Idoko reassured the public that Dangote is a member of CORAN and would adhere to the association’s rules, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) overseeing to prevent any monopoly.