Nigerian marketers may drop Dangote Refinery in favour of low-cost imports

Nigerian oil marketers revealed this week that the price of petrol imports had dropped from NGN955 ($0.61) per litre to NGN922.65 ($0.59), with the price encompassing import duties, shipping fees and exchange rate fluctuations.

In marketer’s eyes, the drop has again made a case for buying abroad over buying fuel from domestic refineries, with a prominent dealer telling Nigerian news outlet Punch that lower import costs were: “An incentive to dealers,” adding: “You won’t blame marketers who import the product”.

The shift in opinion has emerged despite the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) previously vouching for a 180-day halt to fuel imports in a bid to promote local refineries.

Notably, Business Insider Africa recently highlighted that oil marketers in Nigeria had recently begun  to turn towards the country’s 650,000 barrels per day (bpd) Dangote Refinery due to rising depot prices, however, a shift in perception has been driven by the plant’s struggle to match the cheap price of foreign products, due to an increase crude prices across the globe – according to comments made by Dangote Petroleum Refinery. The company continued to remark that crude prices directly influenced the final cost of petrol as it was the main raw material needed to make the product.

Pushing against requests to purchase from Nigerian refineries, marketers continue to argue that there is no binding agreement requiring them to prioritise locally produced fuel over cheaper options, with the disagreement having reached the stage of legal action from Dangote Refinery, with court proceedings set to begin January 30 after the initial date on January 20 failed to go ahead.

Placed against the NMDPRA and the Nigerian National Petroleum Co. Ltd. (NNPCL), the lawsuit aims to stop all new petrol import licences from being issued.

Other companies listed in the suit by Dangote include T. Time Petroleum, 2015 Petroleum, Matrix Petroleum, AYM Shafa, and A. A. Rano.