Dangote Refinery Begins Direct Petrol Supply to Oil Marketers

Last updated: October 24, 2024 9:11 am

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Four Vessels Arrive with 123.4 Million Litres of Petrol to Boost Nigeria's Fuel Supply

Dangote Refinery Begins Direct Petrol Supply to Oil Marketers. The Dangote Petroleum Refinery has started supplying Premium Motor Spirit (PMS), commonly known as petrol, directly to oil marketers, bypassing the Nigerian National Petroleum Company Limited (NNPC). This development is part of a shift towards a willing-buyer, willing-seller arrangement between the refinery and marketers.

Several marketers are now lifting petrol directly from the refinery in Lekki, Lagos. This comes as other marketers are also importing PMS to supplement local supply. Recently, reports indicated that four vessels carrying 123.4 million liters of imported petrol arrived at Nigeria’s seaports, signaling efforts to boost fuel availability across the country.

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A senior official from the refinery confirmed that marketers have begun lifting PMS directly from the facility. The official explained that agreements with several marketers had been reached and more were underway, with pricing arrangements that seem favorable to the marketers. As Nigeria’s demand for petrol remains high, the refinery has prioritized producing PMS, dedicating around 53% of its crude oil processing capacity to petrol production.

This move comes after initial reports suggested that the NNPC would be the sole purchaser of petrol from the Dangote Refinery. However, the Federal Government’s Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency recently announced that petroleum marketers are now able to purchase PMS directly from local refineries without the NNPC acting as an intermediary. This deregulation of the market aims to encourage competition and improve efficiency.

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The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed interest in working with Dangote, following recent discussions between its leadership and Dangote Industries. While IPMAN initially suggested that its members could only lift products once the refinery ended its deal with the NNPC, officials at the refinery confirmed that direct sales to some marketers had already begun.

This shift marks a significant milestone in Nigeria’s oil sector as the Dangote Refinery aims to play a critical role in stabilizing petrol supply and ensuring competitive pricing. The refinery commenced its petrol sales on September 15, with the NNPC purchasing the product at N898 per liter, though further price announcements from the naira-for-crude committee are still pending.