See why expert describes petrol pricing calculations in Nigeria as fraudulent

• An industry expert has criticized the quoted prices for landing costs, describing them as fraudulent in defence of the Dangote Refinery
• He believes marketers should have no reason to keep importing petrol when a local refinery produces more than enough
• The cost of petrol has been a burden to Nigerians over the past year, with average pump prices now above N1,1000

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

An energy sector expert, Kelvin Emmanuel, has described Nigeria's current petrol pricing calculations as fraudulent.

According to him, the process for arriving at the landing cost figures quoted by the Nigerian National Petroleum Company Limited (NNPCL) and oil marketers importing petrol is shrouded in opacity.

Dangote Refinery is expected to end fuel scarcity and bring prices down Photo credit: Bloomberg/contributor
Source: Getty Images

Speaking in an interview, the expert alleged that arbitrage opportunities are one of the reasons petrol imports continue despite the Dangote Refinery's capacity to deliver the fuel Nigeria needs.

He said:

"The structure for calculating the petrol landing price in Nigeria is fraudulent; they keep importing because the arbitrage opportunities benefit them."They know that if they begin sourcing from the Dangote Refinery, they won’t make as much as they used to compared to importing PMS. This is why they are complaining."

Kelvin noted that Dangote has more than enough to meet marketers' demands and wondered why they are not buying yet when the refinery is in Lagos.

He added:

"The Dangote Refinery has 500 million litres of PMS stored in Lagos—so why aren’t they taking the product?Last week, 79 million litres were shipped from the Lekki Refinery to Apapa, and marketers have taken a little over 200 million litres in the last month alone. The Dangote Refinery has enough supply and is producing 32 million litres daily, making it more profitable to buy locally."However, the price from Dangote is cheaper than the landing price they quoted for imported petrol."At a landing price of over N1,100 per litre, they were collecting under-recovery payments from the government, which is why the NNPC has not been able to remit funds to the government."

He called on the marketers' to go to the refinery and discuss with Dangote.

Dangote asks marketers to register

Earlier, Legit.ng reported that Dangote Petroleum Refinery stated that it is false to imply that the Independent Petroleum Marketers Association of Nigeria is having trouble getting refined goods out of its refinery.

The refinery also stated this in response to claims that members are unable to load petrol from the Dangote Refinery after paying N40 billion.

It also said that the release of Premium Motor Spirit to IPMAN has not been authorised or permitted by NNPCL.

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Source: Legit.ng