PMS sales pitch by Dangote makes the product look so simple but can’t the price be lower too?

Meiza Nigeria November 28, 2024

3 minutes read

Naturally, retail buyers and Nigerians in general want to be able to enjoy the benefit of having the largest single-train refinery in the world stationed in their country but analysts know that the Dangote oil refinery will be out to make returns from its investment. [Dangote Industries Limited] — Naturally, retail buyers and Nigerians in general want to be able to enjoy the benefit of having the largest single-train refinery in the world stationed in their country but analysts know that the Dangote oil refinery will be out to make returns from its investment too although not too much. [Dangote Industries Limited]

It hasn’t been enough that the Dangote Refining Company has enough petrol or premium motor spirit supply to fill every engine in Nigeria, the last-mile consumers taking this fuel to their transport vehicles and power-generating sets think it can be a lot more affordable.

Nigeria being a crude oil producer ought to have an environment where the processed variants will be sold cheaply but that is not what this section of the energy market has experienced so far.

On Wednesday 27 November 2024, the Dangote Group via its social media platforms, particularly X put out a sales pitch to the PMS marketing circles letting them know that the fuel now costs ₦970 if they purchase a minimum of 2 million litres at one go. This represents, according to some screaming headlines, ‘a crash’ because the last price value for every litre sold to the marketers was ₦990.

With the transparent Dangote Oil Refinery petrol comes safer Nigerian cities being that the plant wants reduce pollution hazards with its unique range of products. — **With the transparent Dangote Oil Refinery petrol comes safer Nigerian cities being that the plant wants to reduce pollution hazards with its unique range of products.**

So, if this reduction is supposed to be good and well-meaning, why are reactions from Nigerians showing a feeling of under-appreciation? This is because with PMS subsidies stopped according to President Bola Tinubu when he took office in May 2023, an average citizen no matter their socio-economic standing can no longer buy petrol the way they used to know it to be.

Prior to President Tinubu’s inauguration at the Eagles Square in Abuja, the Federal Capital Territory, petrol around filling stations sold for ₦175 per litre. That is a distant memory now, like an event that never happened.

The Dangote Group telling marketers yesterday about the reduction to ₦970 for two million litres worth of premium PMS reminds the ordinary consumer about just how deep in the ground their decline is getting.

ALSO READ: Dangote refinery has so much fuel to give but its local friends’ circle looks thinner after new clash with the oil people

On Wednesday when the new price was announced as a form of appreciation to Nigerians who supported the Dangote Refinery coming on stream, Author., a profile on X tweeted a reply to the company, asking: My question is, if crude is generated from Nigeria, why 970? International market valuation is too lame as an excuse.

His following line is rhetoric, yet it demands an answer. Can you just be Nigerian for once and keep aside all this fuss with the international forces?

As of October 30, 2024, petrol prices in Nigeria varied by region and seller.

In the North West, the Nigerian National Petroleum Company (NNPC) Limited sells petrol for ₦1,070 per litre, while other marketers sell for ₦1,120–₦1,500

The northeast and south-south geopolitical zones seem to be where petrol price has seemed the most expensive ranging from ₦1,300 per litre in Adamawa and Bayelsa. In the latter, marketers are known to sell for around ₦1,450–₦1,500.

It is a fact that petrol prices in Nigeria since last May have been increasing sharply, with the average retail price for petrol in September 2024 being ₦1,030.46, a 64.55 percent increase from the previous year.

Nigeria’s membership in a highly influential cartel seems to be what is doing the damage that most of its citizens do not want. As part of the Organisation of Petroleum Exporting Countries (OPEC) founded in 1975, the country is bound by the rules.

This means that the thinking Nigerians have about petrol prices going back to becoming as cheap as they got 18 months ago is invalid. Their country, for as long as it remains a member of OPEC, will act based on international principles.

Since May 2023 at the president’s inauguration speech, grocery shopping had become five times as expensive as they were a year before and that cast a bad light on him because he had made so many campaign promises about a renewed hope. [Instagram - officialasiwajubat] — Since May 2023 at the president’s inauguration speech, grocery shopping had become five times as expensive as they were a year before and that cast a bad light on him because he had made so many campaign promises about a renewed hope. [Instagram – officialasiwajubat]

If a country that is a member of the organisation decides to go against protocols in terms of their petroleum products pricing, grave consequences are possible like a global embargo on their production and distribution.

While based on local content-building efforts being made by the Federal Government of Nigeria to cut down on needing expat input so much might be yielding rewards as seen in the multiplicity of homegrown capacities in recent years, it is the process after production that will suffer, like the common sales to Europe or Asia through shipping.

Cargoes can be seized by superior naval formations but it will still leave Nigeria with a market and this will be that of Africa’s still dealing with myriads of energy challenges.