IPMAN stakeholder criticizes Dangote Refinery over PMS price hike…calls for privatization of government owned refineries

By Tina Amanda

A key stakeholder of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Dr. Joseph Obele, has expressed concern over the sale of Premium Motor Spirit (PMS) at over ₦800 per liter by the Dangote Refinery, calling it exploitative.

Dr. Obele criticized the arrangement where the Dangote Refinery sells directly to the Nigerian National Petroleum Corporation (NNPC), which in turn sells to marketers.

He questioned the rationale behind the NNPC’s agreement to purchase only 25 million liters from the refinery while importing an additional 15 million liters from the international market.

“The expectations of Nigerians for a reduced price of PMS from Dangote Refinery have turned into frustration, with the rate now exceeding ₦800. Many Nigerians have described this as exploitation.

“The participation of Intermediaries in the supply chain network increases the cost price for any commodity”.

He noted that Sunday 15 September 2024, marked the first loading day for PMS at the Dangote Refinery, and while the news was initially received with excitement, concerns quickly arose over the selling price at retail outlets.

“Current PMS prices at filling stations, particularly in Port Harcourt, have been steep, compounding the economic hardship faced by citizens.

“Despite various projected prices circulating in the media, marketers are still buying PMS at ₦1,100 per liter in Port Harcourt,” Obele added.

Obele also pointed out issues with the NNPC’s online buying portal, which has been inactive for four months. As a result, marketers have been forced to buy from third parties at exorbitant rates.

“Although the NNPC has adjusted its official price to ₦875 per liter for marketers, the portal remains inaccessible as of now, further complicating the situation for marketers.

“The price surge has raised concerns about the affordability of fuel for the average Nigerian, with many calling for a review of the agreement between Dangote Refinery and NNPC”.

He further questioned the scenario where NNPC fixed the price for the Dangote refinery, calling it a command market economy which is against the Principles of the free market economy system.

“The whole argument between the Federal government and Dangote Refinery is anchored on two fears. The fear of monopoly by the Government and the fear of price control by Dangote Refinery.

“The government is protecting the Economy from monopoly, while Dangote Refinery is uncomfortable with the government fixing prices for its finished products. Stakeholders are not comfortable with the fact that all the circumstances surrounding the Dangote Refinery look unclear.

The IPMAN key stakeholder however suggested the privatization of the government-owned refineries in the country to bring down the high cost of PMS.

“The earlier we call for the immediate privatisation of the government-owned refineries, the better we will be as consumers. It is only in a competitive business environment that exploitation or price rigging will be eliminated and consumers will get the most appropriate value for money paid.

“An intensive competitive environment will force PMS price below #400 per liter when our four Refineries are functional in the hands of private entities, but the contrarily will make the selling price extremely expensive for consumers.

“The time for government to. intentionally freeing the sector for full competition is now, because Nigerians are suffering.

“The commencement of loading of PMS at Dangote refinery is a guarantee for product availability, but it is not a guarantee for affordability”.

Obele also criticized the present leadership of the Nigeria Labour Congress, accusing them of failing to adequately represent the interests of Nigerian workers.

“They are a selfish set of people. All previous administrations of NLC got a minimum wage that can buy a bag of rice with more cash, but this set of toothless bulldogs signed a minimum wage that can not buy a bag of rice.

“Nigerians are suffering and the government should not be sharing rice as a remedy to the hardship, rather they should make fuel sell less than #400 per liter”.