•N520bn monthly fuel import expected to drop as Dangote begins supply June

The Federal Government may cut its approximately N6.2tn yearly fuel import bill if the Dangote Petroleum Refinery begins the sale of premium motor spirit as promised by the Chairman of the Dangote Group, Aliko Dangote.

Dangote, while speaking at the Africa CEO Forum Annual Summit in Kigali, Rwanda on Friday, assured Nigerians that following the laid-down plans of the Dangote refinery, Nigeria would no longer need to import petrol starting next month.

The country’s petrol import was reduced to an average of one billion litres monthly after President Bola Tinubu removed fuel subsidy on May 29 last year, according to a report by the National Bureau of Statistics.

According to Dangote, the $20bn refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.

He said, “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.


W’Afria’s needs

“We have enough gasoline to give to at least the entire West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.

“We have started producing jet fuel, we are producing diesel, and by next month, we’ll be producing gasoline. What that will do is it will be able to take most African crudes.”

The assurance by Dangote, if realised, would reduce the country’s approximately N6.2tn annual spending on PMS import.

With an average pump price of N670/litre, marketers put the average landing cost of petrol currently at N520/litre, considering the price of the Nigerian National Petroleum Company Limited, which is the only importer of the product.

Operators also put the average difference between the landing cost and pump price of PMS at N150/litre.

With an average monthly consumption of 1 billion litres, Nigeria currently spends approximately N520bn on the importation of PMS every month. This is N6.2tn annually.

Going by the planned June supply of PMS by Dangote, the country is expected to save a substantial amount from the elimination of shipping and other charges attached to importation, according to operators and industry experts.

The difference between the landing cost and the pump price of petrol is N150 per litre, according to operators.

Landing cost is the total cost of delivering the shipment to Nigeria from a foreign country, including all expenses incurred from the point of production to the point of delivery.

Refined petroleum products often arrive in the country via the Atlas Cove, from where it is transferred to jetties via daughter vessels. From jetties, the fuel is moved to various tanks.

Marketers say this difference of N150 between the landing cost and the pump price has to do with the cost of moving PMS from the port to various filling stations across the country. This also includes marine costs, and the Nigerian Ports Authority charges, among others.

The PMS landing cost is different from that of diesel, aviation fuel, and other petroleum products.

In foreign currency, the country spends an average of $4.16bn annually if converted the N6.2tn at the rate of N1,520 per dollar. However, there are arguments that the NNPCL spends more than this on PMS importation.

The actualisation of Dangote’s promise is expected to strengthen the naira.

According to industry reports, Nigeria spends at least $10bn annually on the import of PMS, aviation fuel, diesel and other petroleum products.

Analysts believe that not less than one-third of the country’s annual foreign exchange expenditure goes into fuel imports.


Importation stoppage

A reliable source at the Central Bank of Nigeria said that the anticipated commencement of fuel supply by the Dangote refinery in June would herald a positive shift in the nation’s economy.

According to the source, the move to halt fuel imports will lead to a substantial reduction in the demand for foreign exchange, thereby strengthening Nigeria’s economic position.

The source further noted that, with the demands on forex reducing, the naira would regain strength.”As the dollar demand reduces, the naira will rebound and that is good for the economy,” the CBN source said.

When contacted, the NNPCL spokesperson, Olufemi Soneye, declined comments.

Soneye said the NNPCL is no longer a corporation and could not comment on Dangote refinery’s impact.

The Director of Press and Public Relations, Ministry of Finance, Mr. Mohammed Manga, could not be reached for comments on Sunday as calls and messages sent to him went unanswered.

Also, the Director of Corporate Communications, Central Bank of Nigeria, Hakama Sidi Ali, did not respond to calls to her phone. She had yet to respond to a message sent to her line.

But the Director-General of the Centre for the Promotion of Public Enterprise, Dr Muda Yusuf, said the commencement of refining of petrol by the Dangote refinery would be a game changer for the Nigerian economy, especially from the perspective of the effect on the foreign exchange market and domestic energy cost.

Yusuf noted that, currently about 30 per cent of Nigeria’s import bill is on petroleum products.

“This has been estimated at between $10bn and $15bn annually over the decade. This would amount to a substantial easing of demand pressure on the foreign exchange market,” he stated.

Yusuf added further, “Already we have seen the impact of the domestic refining on diesel and aviation fuel importation. Even the prices have dropped. I therefore expect to see a major impact on the exchange rate.

“However, this positive outlook would depend on how much of the feedstock of crude can be sourced locally by the refinery. If the refinery has to resort to crude oil importation, the optimism about the foreign exchange impact may have to be moderated. Because that would imply some significant forex outflows for crude importation.”

He added that Nigeria is likely to see less importation of petrochemical products and other associated by-products from the refining process.

During an energy conference in Abuja recently, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, opined that Nigeria does not need to import fuel, expressing concerns that the bulk of the country’s foreign exchange goes into fuel importation.

“We must find a solution to our forex problem. Nigeria does not need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products.” Lokpbiri stated, expressing optimism that home-based refineries would put an end to fuel importation.


Marketers plan meeting

Meanwhile, fuel marketers said plans had been concluded to meet Dangote for discussions on possible price cuts as his refinery begins the production of PMS next month.

The marketers, under the aegis of the Independent Petroleum Marketers Association of Nigeria, told The PUNCH on Sunday they would meet with Dangote to negotiate a discount through bulk purchases.

Dangote’s 650,000 barrels per day refinery has been trying to secure crude supplies from the United States following the inability of Nigeria to ramp up production.

The refinery, which is the largest in Africa and Europe when it reaches full capacity, has since commenced the sale of diesel and aviation, but its petrol is yet to hit the market.

In April, Dangote crashed the price of diesel from around N1,500 to N1,000 per litre.

But Nigerians are currently eagerly waiting for petrol, which is the major fuel used by transporters, small-scale businesses and individuals for alternative power generation.

The promise of Dangote to end fuel import may be a relief to marketers and Nigerians, who are yet to fully recover from the recent fuel scarcity that nearly brought the economy to a halt in Lagos, Abuja and other parts of the nation.

Speaking in an interview with our correspondent, the National Vice President of the IPMAN, Hammed Fashola, disclosed that the marketers had requested a meeting with the Dangote Group chairman.

According to Fashola, there will be a follow-up to a letter written to Dangote earlier to fast-track a meeting and reach an agreement before the commencement of the sale of PMS.

Fashola had earlier called on the company to consider working directly with the association instead of individuals.

He noted that IPMAN should be a beautiful bride before Dangote for being in control of over 80 per cent of the filling stations in Nigeria.

The IPMAN leader said, “We have our letter with them, we are expecting their response, and we will surely do a follow-up. The letter was sent about a month ago and we are going to follow up. We are just like a ready-made market for Dangote. It is an advantage for him to have us in his programme. I believe that he would like to have us.”

He added that the association would request a discount during the meeting with Dangote.“You know when you come together as a group, you have that negotiating power on your strength. There is no way we will not negotiate for a discount. That is why we don’t encourage individual company participation,” he stated.

https://punchng.com/dangote-petrol-supply-fg-may-slash-n6tn-fuel-import/?amp

Nlfpmod

In 2004,Asiwaju started the Lagos Free Trade Zone Project.20 years later the project now hosts what is gradually transforming to be the biggest Industrial Hub in West Africa
In 2024,Asiwaju started the Coastal Road from Lagos to Calabar,20 years later Nigerians will look back and understand the power of progressive thinking

Coming to the Dangote Refinery,it is time to hold the NNPCL liable,where are the by products from our crude oil for the last 20 years they started this crude oil swap
Those by products alone would have been worth over 5 billion dollars over the last 20 years,can this Government demand for a proper account of this products
I expect companies to start the process of backward integration for petroleum by products
Let me end by saying that the Ibeju Lekki Industrial Hub is getting busier by the day,you can check my signature to see how you can get a good property deal with good titles

Nigeria is on the March Again

At least now,there is no excuse for not paying 100k minimum wage
This is why subsidy had to go,from June there will be zero subsidy and hopefully they can use the money to improve other sectors of the Economy. This Government is really being set up nicely to have enough funds to either make a mark or continue the culture of looting

We will, we may, we are going to, we are hoping on. Etc

Propaganda doesn't run an economy.

Distribute the petrol first before telling us the resulting effects. Not by hyping and talking too much and at the end we won't see much difference.

Temmydgreat:
At least now,there is no excuse for not paying 100k minimum wage
This is why subsidy had to go,from June there will be zero subsidy and hopefully they can use the money to improve other sectors of the Economy. This Government is really being set up nicely to have enough funds to either make a mark or continue the culture of looting

Them get plenty excuses abbegg..

THIS IS NIGERIA.

Q

Wow

Hmm

😂🤣🤣🤣🤣


Nigerians are tired of we will etc.....do the necessary, and get this country outta the mess

Kikikiki..FG "may" slash wetin??

Many believe that once all refined products are purchased locally, these would to a reduction in forex demand as the country no longer needs to expend large amount of dollars importing petrol. I'll be honest, it changes little or nothing. I very much doubt it would reduce the demand for forex.

For instance if locally produced petrol was 30% above the international price, and the government buys at that price and resells at a subsidized price, would it reduce pressure on the foreign reserves? I say no. It might actually make things worse as it would increase the cost of subsidizing petrol, which is actually the elephant.

The cost of subsidizing petrol has always been the problem. It leaves a massive hole in the pressure which is filled through borrowing. This borrowing is inflationary and puts pressure on the Naira, weakening it.

The government must completely end petrol subsidies by deregulatung the price as already done with diesel and kerosene. With the end of subsidies, the pressure on the Naira would lesson and also the pressure on the forex.

What will really have the greatest effect on the Naira is an export boom.

If not well plan watch as scarcity fill every where again

MAY,nt even sure sef

.

Some people will still not be happy with this good news. They hate anything good about Nigeria but want to rule it. We all know the game. They are only interested in the Niger-Delta oyel money to develop their mud-ravaged region, building gutters, tunnels, canals, dredging of rivers to create seaports in landlock region, airports etc.
They should rely on their FEC monthly allocations to do those projects if they really believe in them. That is what other regions too rely on. No free meal.

this is good news

Wow

The Otedola$, Alakija$ and several Petrol Import Busine$$ men will not love this new development because their main source of wealth for years has been petrol importation. Good thing Nigeria finally decided to get small sense and start refining her own petrol

Hhhjj

Temmydgreat:
At least now,there is no excuse for not paying 100k minimum wage
This is why subsidy had to go,from June there will be zero subsidy and hopefully they can use the money to improve other sectors of the Economy. This Government is really being set up nicely to have enough funds to either make a mark or continue the culture of looting

you are very right, it now left for the government at all level to perform because they have been receiving a lot of money, expecially governors. My instinct tells me Tinubu might prove us wrong who actually didn't support him. One advantage to him, is that he can't be control by anybody, so if he put Nigeria first in his mind, he will do great things. I so much like the coaster road that when completed will open south south especially knowing fully our contribution to the country. Golduck failed us in that regard. We shouldn't still be talking about east west road.

Another lamba

All these future tense don tire us.

Make una do make we see.

Tinubu's name should be synonymous to propaganda. Tueh!

Still does not mean that we should expect petrol to be sold below the market price...

Kenochi:
In 2004,Asiwaju started the Lagos Free Trade Zone Project.20 years later the project now hosts what is gradually transforming to be the biggest Industrial Hub in West Africa
In 2024,Asiwaju started the Coastal Road from Lagos to Calabar,20 years later Nigerians will look back and understand the power of progressive thinking

Coming to the Dangote Refinery,it is time to hold the NNPCL liable,where are the by products from our crude oil for the last 20 years they started this crude oil swap
Those by products alone would have been worth over 5 billion dollars over the last 20 years,can this Government demand for a proper account of this products
I expect companies to start the process of backward integration for petroleum by products
Let me end by saying that the Ibeju Lekki Industrial Hub is getting busier by the day,you can check my signature to see how you can get a good property deal with good titles

Nigeria is on the March Again

We should also thank PDP, whose brillant idea of encouraging this refinery is why we have it here.

kedeojo:
you are very right, it now left for the government at all level to perform because they have been receiving a lot of money, expecially governors. My instinct tells me Tinubu might prove us wrong who actually didn't support him. One advantage to him, is that he can't be control by anybody, so if he put Nigeria first in his mind, he will do great things. I so much like the coaster road that when completed will open south south especially knowing fully our contribution to the country. Golduck failed us in that regard. We shouldn't still be talking about east west road.

If d useless man can prove useful and turn this country around.

I'll campaign for him and vote him for next election.

nathyx:
The Otedola$, Alakija$ and several Petrol Import Busine$$ men will not love this new development because their main source of wealth for years has been petrol importation. Good thing Nigeria finally decided to get small sense and start refining her own petrol

Otedola has shares in dangote cement. And he has been seen visitng the refinery. He might be happy.