Business

Port Harcourt Refinery: Oil Marketers Demand Lower Prices as NNPCL Delays Petrol Price Rollout

Published by Tope Fakinlede on November 28th, 2024.

Port Harcourt Refinery: Oil Marketers Demand Lower Prices as NNPCL Delays Petrol Price Rollout

Oil marketers are laying out specific conditions they expect the Nigerian National Petroleum Corporation Limited (NNPCL) to meet before they engage with the newly revived Port Harcourt Refinery in Rivers State. Key among these is the demand that prices for refined petroleum products from the Port Harcourt plant must be set lower than those of Dangote Refinery.

In response to reports on Wednesday indicating that the price of petrol from the NNPCL was around N1,045 per litre, the corporation clarified that it had not yet set official prices. It also stated that its refined products are currently only available at NNPCL-owned stations. NNPCL’s spokesperson, Olufemi Soneye, confirmed that the company was still evaluating its pricing and had not yet initiated bulk sales, as its purchase portal is still closed.

Meanwhile, industry sources revealed that between November 23 and November 28, oil marketers imported a total of 105.67 million litres of petrol, with some suppliers indicating that the NNPCL’s petrol price was less competitive than that of Dangote Refinery. Marketers noted that they may consider increasing fuel imports if the prices set by NNPCL’s domestic refineries undermine their profitability.

The Port Harcourt Refinery, which resumed operations on November 26 after years of inactivity, has generated considerable interest. The Nigerian oil giant stated that the refinery is currently operating at 70% of its capacity and is expected to produce a variety of products, including diesel, kerosene, and Premium Motor Spirit (PMS). The NNPCL expects to release up to 200 trucks of petrol into the market daily.

However, the issue of price competitiveness remains a sticking point. The Independent Petroleum Marketers Association of Nigeria (IPMAN) voiced concerns, with spokesperson Chinedu Ukadike emphasizing that for independent marketers to purchase from the Port Harcourt refinery, the price must be lower than Dangote’s, which is currently N970 per litre. He also expressed hope that NNPCL would review its prices downward, in line with global trends.

Despite the ongoing discussions, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) clarified that, as of now, no official prices have been issued for petrol from the Port Harcourt Refinery. According to PETROAN’s President Billy Gillis-Harry, their members continue to purchase PMS at previous rates and are awaiting updated pricing information.

NNPCL reiterated that it has not yet begun selling to external marketers and that all current supplies from the Port Harcourt facility are directed to its own retail stations. The company assured that price reviews are ongoing, with adjustments likely to occur once operations fully scale up.

The issue of domestic production versus imports remains critical. In recent days, over 78,800 metric tonnes of petrol, or 105.67 million litres, were brought into the country, including shipments to major ports in Lagos, Calabar, and other key locations. This move highlights the ongoing reliance on imports, even as domestic refineries ramp up production.

At a recent meeting, NNPCL executives and stakeholders expressed confidence in the local refineries’ ability to meet domestic demand and reduce the nation’s dependence on imported fuel. However, for this plan to succeed, the pricing strategy at the Port Harcourt Refinery will need to be competitive with imports and other domestic sources, such as the Dangote Refinery.

As the NNPCL continues to assess its pricing structure, the coming weeks will determine whether the newly revived Port Harcourt Refinery can become a significant player in meeting Nigeria’s fuel needs.