It is important to note that from September 16 to November 24, 2024, MEMAN members procured a total of 148 million liters of petrol from the Dangote refinery, which is valued at $20 billion and situated in Lagos. This translates to an average of approximately two million liters per day over the ten-week period.
Presently, major marketers such as 11 Plc., Ardova Plc., Conoil, MRS, Nigerian National Petroleum Company Limited (NNPCL), and TotalEnergies collectively account for approximately 40 to 50 percent of Nigeria's market share for petroleum products.
Isong was represented at the event by Ogechi Nkwoji, MEMAN’s Head of Economic Intelligence, Research, and Regulation. During his presentation on “Fuel Pricing,” he elaborated that although association members possess licenses to import petrol, they have recently favored local supplies from the Dangote refinery due to the existing competitive market conditions.
He explained that the products obtained from the Dangote refinery are transported to the marketers' facilities in Lagos using trucks and vessels, emphasizing the supply chain's operational flexibility. Isong provided a detailed account of the volumes lifted over the ten-week period, indicating that MEMAN members loaded 29,468,333 litres in Week 38 (September 16–22, 2024), followed by 20,843,322 litres in Week 39, and 27,236,283 litres in Week 40.
He said, “However, volumes began to decline in subsequent weeks, reaching a low of 1,600,000 litres in Week 46.
“The supply slightly rebounded to 11,596,397 litres by Week 47 (November 18–24, 2024).”
Isong indicated that the initiative originated from a directive issued by the federal government through the Ministry of Finance, which eliminated NNPCL’s role as an intermediary. This change allowed independent petroleum marketers to negotiate and acquire petrol directly from local refineries, thereby enhancing competition and efficiency in the market.
He reported that the spot price of petrol, based on the 30-day pricing trend from October 10 to November 22, 2024, was N976.07 per litre, with an average price of N971.14 per litre during that timeframe.
Isong also noted that the estimated product cost per metric tonne was N708,390, calculated using a foreign exchange rate of N1,665.99 to the dollar. Regarding the factors affecting petrol pricing in Nigeria, he highlighted that key cost elements included the jetty location, such as ASPM, and a standard product quantity set at 38,000 metric tonnes.
He stated, “The pricing methodology relies on the Argus Gasoline Euro-Bob benchmark for West African deliveries, combined with an average premium.
“The exchange rate is derived from the Central Bank of Nigeria’s (CBN) weighted average rate within the Nigerian Foreign Exchange Market (NFEM), which significantly impacts the final price.”
Isong noted that finance charges significantly impacted the overall cost structure, which is set at 32 percent annually over a 30-day period. He explained that freight expenses for Ship-to-Ship (STS) operations and associated charges corresponded to a 10-day delivery schedule to the ASPM jetty, specifically the Lagos Midstream Jetty (LMJ) situated at the Lagos Apapa Harbour.
Additional local charges include fees levied by the Nigerian Ports Authority (NPA) for services such as towage, berthage, and cargo handling, along with contributions to NIMASA at two percent of local freight and regulatory fees from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which collectively impose a one percent levy.
Furthermore, miscellaneous costs are capped at N2.00 per liter, underscoring the intricate fuel pricing landscape in the country.