The Dangote Petroleum Refinery has commenced direct supply of Premium Motor Spirit (PMS), commonly known as petrol, to oil marketers, bypassing the Nigerian National Petroleum Company (NNPC) Limited.
This move marks a significant shift in Nigeria’s fuel distribution landscape.
Reports indicate that more oil marketers are now seeking to purchase petrol directly from the Lekki-based refinery, which operates on a willing-buyer, willing-seller basis.
This development comes as other marketers continue to rely on imports, with hundreds of millions of litres of imported PMS expected to arrive at Nigerian ports within the next two weeks.
According to sources, between Friday, October 18, and Sunday, October 20, four vessels carrying approximately 123.4 million litres of imported PMS docked at seaports along the nation’s borders.
This aligns with previous reports that oil dealers plan to import fuel to supplement supplies from the $20 billion Dangote refinery.
“Marketers are already coming to the refinery to lift PMS. They are lifting directly from the refinery, not through a third party,” the reliable official, who spoke in confidence due to lack of authorisation to speak on the matter, stated.
The source, who could not tell the price at which marketers were lifting the product, noted that the oil dealers would not come if the price was not favourable to them.
“We have reached agreements with some of the marketers and more are still ongoing. I don’t know the exact price, but if the price is not good, the marketers would not be coming to us,” the official stated.
He maintained that things are improving, especially as the Federal Government commenced the supply of crude to the facility.
Another official at the facility showed one of our correspondents the trucks of some marketers loading the product directly from the plant without going through NNPC.
“Some of the trucks you saw there today were from marketers purchasing the product directly from Dangote, without recourse to NNPC. So the direct sale has started,” the source stated.
The official explained that due to the high demand for petrol in Nigeria and other countries, the refinery had focused on ensuring 53 per cent of PMS production from its crude oil supplies.
“This could be reviewed in future if the demand for other finished products increases more than the demand for petrol, but right now about 53 per cent of our crude is used for petrol production, while other products account for the remaining percentage,” the official stated.
When asked if marketers had started the direct purchase of petrol from Dangote without recourse to NNPC, one of the notable major marketers in the country replied in the affirmative.
“Yes, everyone is in the process. This was advised that it would happen soon and is a normal business transaction,” the source stated.
But this is contrary to claims from some quarters that the refinery would not be able to sell petrol to marketers unless the deal between it and the NNPC is terminated.
The PUNCH recalls the company had initially announced that the NNPC would be the sole off-taker of its petrol from September 15.
A source at the refinery said this was as decided by the Federal Government. The source said he was taken aback when the Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency announced on October 11 that marketers should now lift petrol directly from the refinery.
“Moving forward, petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of NNPC. Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency,” the Minister of Finance, Wale Edun, who heads the committee stated in a statement.
As the committee made the announcement, operators said the market had been fully deregulated and they would approach the refinery to apply for PMS lifting.
The PUNCH recalls that the Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, recently led other officials of the association to a meeting with the Vice President of the Dangote Industries, Devakumar Edwin, in Lagos.
Though Fashola did not give much updates about the meeting with Edwin, he appreciated him for the roles he had been playing.
“Edwin received us very well and promised to make things easier for IPMAN to do business with Dangote,” he said.
Fashola added, “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.”
However, IPMAN said it could not commence the immediate off-take of the product unless the refinery ends its contract with the NNPC.
But officials at the refinery stated that the refinery was now selling PMS to some marketers.
When the Dangote refinery began the sale of PMS on September 15, the NNPC said it bought the product at the rate of N898/litre; a claim the refinery described as mischievous.
The refinery said the naira-for-crude committee would be the one to announce the price of its PMS. The committee has yet to do so as of October 22.
(PUNCH)