Dangote Refinery Starts Direct Sales of Petrol to Oil Marketers, As NNPC Quits Intermediary Roles

Oluwasegun SanusiOctober 24, 20242 Mins read188

The Dangote Petroleum Refinery has commenced direct supply of petrol to oil marketers without the involvement of the Nigerian National Petroleum Company Limited (NNPC) as a shift in Nigeria’s fuel distribution, with oil marketers now able to purchase petrol directly from the refinery on a willing-buyer, willing-seller basis.

According to reports, sources within the refinery confirmed that marketers are already lifting PMS directly from the Lagos-based refinery, with more companies negotiating similar deals.

While the source did not disclose the price at which the product is being sold, he added that marketers would not engage in these transactions if the terms were unfavourable. This development comes amidst ongoing efforts by oil dealers to supplement local supply by importing fuel.

It was reported recently by THE PUNCH that four vessels carrying approximately 123.4 million litres of imported PMS berthed at Nigerian seaports, aiming to improve fuel supply across the country.

According to industry reports, hundreds of millions of imported petrol will arrive in Nigeria within two weeks.

Earlier reports indicated that the NNPC was to be the sole off-taker of Dangote Refinery’s products as of September 15. However, a decision by the Federal Government’s Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency, announced on October 11, opened the door for marketers to purchase PMS directly from local refineries.

The committee, headed by Finance Minister Wale Edun, stated that this change would promote competition and improve market efficiency.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has been actively engaged in discussions with Dangote Industries regarding the logistics of purchasing PMS directly from the refinery.

Hammed Fashola, Vice President of IPMAN, expressed optimism following a recent meeting with Dangote Industries’ Vice President, Devakumar Edwin, in Lagos.

We had a fruitful discussion with the group. We have started discussing modalities and other logistics. IPMAN has agreed to work with Dangote. We hope very soon we will start lifting products from the facility, Fashola stated after one of the discussions.

Despite initial concerns that the refinery could not sell PMS directly to marketers without terminating its contract with NNPC, refinery officials confirmed that such direct sales have begun.

The pricing of PMS from Dangote Refinery remains a point of speculation. While the NNPC previously claimed to have purchased PMS from the refinery at N898 per litre, Dangote officials dismissed this figure, calling it misleading. The Naira-for-Crude Committee, responsible for setting the official price, has yet to announce a fixed price as of October 22.

It was also earlier reported that after the intervention of the Department of State Services (DSS), the Nigerian National Petroleum Company Limited (NNPC) agreed to sell Premium Motor Spirit (PMS) to members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at an ex-depot price of N995 per litre.

Earlier this month, NNPCL increased the pump price of petrol at its retail outlets to N1,030 at NNPCL days after it terminated its exclusive purchase agreement with the Dangote Refinery to allow independent oil marketers to buy directly from the refinery.

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