Locally refined petrol has maintained a price advantage over imported Premium Motor Spirit (PMS), with industry data showing that imported fuel currently costs about N46 per litre more than petrol supplied by the Dangote Petroleum Refinery. The latest figures are likely to intensify calls from oil marketers for the Federal Government to reconsider the continued importation of petrol, particularly as domestic refining becomes increasingly competitive.

According to the latest energy bulletin from the Major Energies Marketers Association of Nigeria (MEMAN), Dangote’s gantry price stood at N1,265 per litre, compared with a spot import-parity price of N1,310.64 per litre under the ASPM benchmark. Under another benchmark, the import-parity price was N1,309.63 per litre. This means imported petrol was between N44.63 and N45.64 per litre more expensive than the locally refined product, despite Dangote recently increasing its gantry price from N1,165 to N1,265 per litre.

The price difference has renewed debate over the economic sense of importing petrol when domestic refineries can supply the market at a lower cost. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has previously urged the Federal Government to halt petrol imports, arguing that imported products have become more expensive and that continued import licences are putting additional pressure on the naira. IPMAN National Publicity Secretary, Chinedu Ukadike, questioned the rationale behind importing petrol from locations such as Lomé when the product is available locally at a lower price.

The development also comes as the Dangote refinery considers restricting petrol sales to major marketers that continue to import PMS. The refinery has raised concerns about the alleged blending of imported petrol with its products and the ability to properly verify the quality of imported fuel. Dangote also recently warned that imported PMS accounted for about 43 per cent of petrol supplied into Nigeria in July, forcing the refinery to export excess stocks despite having sufficient production capacity to meet domestic demand.

Meanwhile, depot prices show that Dangote continues to offer one of the lowest petrol prices in the country, with PMS listed at N1,265 per litre in Lagos, compared with N1,267 at MRS and N1,280 at several other major depots. The latest figures suggest that domestic refining is gaining a stronger cost advantage as international refined-product prices and foreign exchange movements continue to affect imported fuel. With crude prices also rising and the naira trading at different rates across official and parallel markets, the widening gap could further strengthen the argument for greater reliance on locally refined petrol.

source: punch