Financial Energy Review
… Not new, says NNPCL
…this development may have informed Dangote’s decision to slash fuel prices–stakeholders
The Port Harcourt Refinery has finally begun production of intermediate products that will further be blended into Premium Motor Spirit or Petrol.
The old Port Harcourt Refinery with 60,000 barrels capacity per day, according to sources, started producing ethanol a few days ago.
Multiple sources within the refinery told Business Standards that the plant has produced its first ethanol in recent times, an intermediate product, which is in the process of being blended into petrol.
Another source simply said: “The old plant has started production”
This development it was gathered has elicited lots of joy among the workers in the plant while traffic of government officers to the refinery has increased in the last few days. “Government officers from Abuja and Lagos have been visiting the refinery in the last few days,” a source told Business Standards.
The sources said the management of NNPCL is being cautious about announcing the development given the fact that it has fixed several deadlines that were not met. But they believed that once the management is convinced that everything is in order it will make the good news public.
This development was however played down by the Nigerian National Petroleum Limited Chief Group Communications Officer, Femi Soneye when Business Standards tried to confirm from him.
He said this development is not new as the company had reported sometime that the plant had started production of Naphtha oil, adding that since the mechanical completion of the plant in December last year, commissioning of the various types has been taking place.
“You know the plant is made up of various units, these units must be tested and commissioned before they are put into full operations. This has been taking place one after the other over several months.”
This development will surely engender serious competition between the private refineries and the NNPC and the price of the product may also come down for the convenience of Nigerian consumers.
Some stakeholders believe that the management of the Dangote Refinery may have been monitoring developments in the various government refineries with the aim of positioning itself for better patronage among consumers.
On Sunday, the Dangote Petroleum Refinery slashed the price of its Premium Motor Spirit from N990 per litre to N970/litre.
According to the company, this amount is what marketers would buy the product from the refinery.
Anthony Chiejina the Group Chief Branding and Communications Officer of the Dangote Group, in a statement released on Sunday, said the reduction was to appreciate Nigerians as the year ends.
“As the year comes to an end, this is our way of appreciating the good people of Nigeria for their unwavering support in making the refinery a dream come true. In addition, this is to thank the government for their support as this will complement the measures put in place to encourage domestic enterprise for our collective well-being,” the statement read.
Chiejina stated further that the refinery would not compromise on the quality of its petroleum products while assuring Nigerians of the best quality products that are environmentally friendly and sustainable.
“We are determined to keep ramping up production to meet and surpass our domestic fuel consumption; thus, dispelling any fear of a shortfall in supply,” the statement concluded.
The Major Energies Marketers Association of Nigeria ( MEMAN)said on Friday that the landing cost of imported petrol is now N971/litre.
Recently, both independent and major marketers confirmed that the pump prices of petrol had started reducing in many parts of the country due to the competition that the deregulation of the downstream sector has caused.
The spokesman, Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said the agreement between IPMNAN and the Dangote refinery is gradually pushing down the price of PMS.
“By just the announcement that IPMAN and Dangote have met and are ready to transact business, the prices of products have crashed. You would have noticed the drop in prices by N10, N15, or so, and this is due to competition.
“Independent marketers are no longer buying from middlemen. We are going to be buying directly from the producer. So, the competition is setting in. I also want to tell you that before the end of this year, the price will not be as high as what you see now.
“You can see how our meeting with Dangote has significantly removed about N10 from the prices of refined petroleum products. It is a good development. We have not even started. Remember I once told you that prices would drop once IPMAN started lifting from Dangote,” Ukadike stated.
Also confirming the drop in prices, a major oil marketer stated that this was due to the deregulation of the downstream oil sector.
“People are not noticing that prices are going down, primarily because there are no big announcements. Deregulation is in full swing and competition is the order of the day,” the major oil marketer, who spoke in confidence due to lack of authorisation to speak on the matter, stated.
When told that the cost of petrol was still above N1,000/litre and was N1,070/litre in filling stations operated by his company, the dealer replied, “Last week it was N1,080 (in some filling stations) if you were observant.
“You may not see N900; that is below cost. Just stop expecting a permanent fixed price. It can come down and it can go up.”
