A price battle is unfolding in Nigeria's oil sector as Dangote Petroleum Refinery strives to maintain stable petrol prices while independent marketers increase fuel imports, challenging domestic refining efforts.
Dangote Petroleum Refinery has successfully utilized the naira-for-crude deal to lower petrol prices, making costs at the pump more affordable.
Anthony Chiejina, the Group Chief Branding and Communications Officer, emphasized the refinery's commitment to price stability despite global oil market fluctuations.
This aligns with the Nigerian government’s 'Nigeria First Policy,' aimed at supporting the economy and easing consumer burdens.
However, the refinery's efforts face hurdles as independent oil marketers ramp up petrol imports, with over 496.17 million liters imported in just nine days.
Industry sources say marketers prefer international supplies over Dangote's due to competitive pricing and operational challenges at the refinery.
But Aliko Dangote, the President of Dangote Group, has expressed concerns about the refinery's survival amidst increased imports.
Despite enhanced production capacity, major marketers' reluctance to buy in bulk from the refinery has intensified tensions, stemming from what stakeholders describe as unfavorable business conditions.
The import surge follows unscheduled maintenance at the Dangote Refinery, resulting in reduced output and reliance on European supplies to meet regional demand.
Stakeholders cite pricing models and logistics as key factors influencing marketers' decisions to import rather than source locally.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), told a national daily that deregulation has turned the downstream sector into a survival battleground, with marketers weighing options between importing fuel and sourcing from Dangote.
Billy Gillis-Harry, the President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), warned that current market dynamics resemble risky strategies seen globally, potentially leading to instability.
