3 hours Ago By Ayo Yusuf
•Insists competition will lead to fall in prices of products •National oil company declares no bulk sales yet Emmanuel Addeh in Abuja The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) yesterday disclosed that the Nigerian National Petroleum Company Limited (NNPC) has decided to cut its ex-depot price for petrol from its Port Harcourt Refinery from N1,045 per litre to N1,030 per litre. PETROAN President, Dr. Billy Gillis-Harry, who revealed this in Abuja, during a Strategic Meeting and Award Presentation, noted that the organisation was able to make a case convincing the NNPC of the need to reduce the ex-depot petrol price.
However, in reaction, the NNPC yesterday said the Port Harcourt Refining Company was yet to commence bulk sales or open its purchase portal, saying essential processes were still being finalised. “Currently, the products we are selling originate from the Dangote Refinery and include applicable NMDPRA fees. Products from PHRC are exclusively for our retail stores at this stage.
Our pricing is reviewed and adjusted periodically as necessary to reflect operational realities. “We advise the public to disregard any misleading information regarding pricing. Official announcements will be made if and when price reviews occur,” a statement signed by the NNPC spokesman, Olufemi Soneye said.
The NNPC on Tuesday said it had begun trucking out about 1.4 million litres of petrol per day from the Port Harcourt refinery which had remained decrepit for years. However, there have been argument that the facility was only blending products.
However, at the event during which a former Managing Director, Crude Oil Marketing Division, NNPC, Prof. Billy Okoye, was conferred with life patron of PETROAN, Gillis-Harry emphasised that there was nothing wrong with blending products. “One of the great things that have come out in the last few days is that PETROAN was able to make its case to ensure that petroleum products are received at a cheaper price.
“Today, NNPC has reduced their price to N1,030, and we are still hoping and pushing that it will still come down lower. Our energy security is very critical, and that is why PETROAN as an organisation has consistently pushed for in-country refining capacity to be enhanced. “And that is why we are at the forefront of those who are advocating for the naira-for-crude oil for domestic refining.
We were at the forefront of organisations in the country that asked for the refineries to be given at a state of emergency to make sure that our refineries are working,” Gillis-Harry stated. At the moment, the Dangote refinery, which is the only major competition to NNPC, sells the product for N970 per litre to the marketers, but with a minimum purchase of 2 million litres. However, the NNPC has not made an official pronouncement on the pricing if its petroleum products from the Port Harcourt refinery.
Gillis-Harry also dismissed insinuations on the quality of fuels from the refinery stating that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) gives standard specifications of petroleum products in Nigeria. According to him, when products are brought from anywhere into the country, one can be sure that it has been approved by the NMDPRA, the sector regulator. He said while it was possible to get products from the Dangote refinery and possibly pay for products later, it wasn’t the same for the Dangote facility, making the turnover from buying from NNPC higher.
He added: “(This is) because most of our members are going to be struggling to get N50 million or thereabout or even N60 million to buy products. Now, that is not what is easily affordable. So we, as retail outlet owners, you can see why we are very close to NNPC.
“Because we can go there and buy one product, sell and quickly turn it around, and then come back. But then, if we have to buy two million litres, we must go together.” He argued that the competition emanating from the free market operation will eventually bring down petrol prices further, noting that owing to the need to patronise domestic refineries, the association had suspended its plan to import the products.
“So, we are not going to start importing if there is product availability. So, wherever is best, we are not going to be looking for dollars to start importing when we can get a naira-dominated transaction from Dangote, from Port Harcourt Refinery, from Warri Refinery, from all the refineries in Nigeria,” the PETROAN boss said. In his remarks, the retired NNPC top official, Okoye, expressed happiness that he was picked to be a life patron of PETROAN, advising against the over-politicisation of the association.
On the expected ‘price war’ between the Dangote Refinery and NNPC’s Port Harcourt Refinery, he said that it will only lead to more competition, which he said is good for the downstream sector. “When the President made that announcement that ‘subsidy is gone’, what it means is that the market is fully deregulated. So with Dangote coming on stream and NNPC refinery coming on stream, what it means that the market is fully deregulated.
“You buy where you see that is most economically viable for you and you sell because now the market determines the price. So there’s no price war. It’s the same thing as in any market where the forces of demand and supply will determine the price.
“So it’s a good thing for Nigeria. And I tell you that within the shortest possible time, the price of petroleum products will crash. This is exactly what happened with the SIM card,” he pointed out.
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