FG Designates NNPCL as Sole Buyer of Petrol from Dangote Refinery

The Federal Government has announced that the Nigerian National Petroleum Company Limited (NNPC) will serve as the exclusive buyer of Premium Motor Spirit (PMS) from the Dangote Refinery. Marketers interested in purchasing PMS will be required to source it through NNPC’s trading company.

This decision is part of an agreement with the Dangote Refinery, outlining the commercial terms for crude oil supply to the refinery and the distribution of petrol and diesel from the facility. The announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a press briefing in Abuja.

This development contradicts an earlier statement from NNPC, issued at the beginning of the month, where it claimed that it did not intend to be the sole distributor of petrol produced by the Dangote Refinery. The directive suggests that the government will retain control over product pricing, as it will be based on agreements between the government and the refinery.

Represented by the Executive Chairman of the Federal Inland Revenue Service, Dr. Zaccheus Adedeji, the minister further announced that the Dangote Refinery would begin distributing petrol to marketers on Sunday, starting with 25 million liters per day.

“I am pleased to announce that all agreements have been finalized, and the first batch of PMS will be loaded as announced by NNPC, starting Sunday, September 15, 2024. From October 1, NNPC will begin supplying crude oil to the Dangote Refinery, with payments made in naira. In return, Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market, also to be paid for in naira,” Edun stated.

He added that, for now, PMS will only be sold to NNPC, which will then distribute it to various marketers.

The minister also confirmed that all associated regulatory costs from agencies such as the Nigeria Ports Authority (NPA), the Nigerian Maritime Administration and Safety Agency (NIMASA), and others will be paid in naira.

“Diesel will be sold in naira by the Dangote Refinery to any interested buyer. All related regulatory fees, including those from NPA, NIMASA, and the Federal Inland Revenue Service, will be settled in naira,” he noted.

A technical committee involved in shaping this initiative will now transition into an Implementation, Execution, and Monitoring Committee, working from Lagos for the next three to six months.

Regarding the approval to sell crude oil to local refineries and purchase petrol in naira, Edun explained that this policy would ease pressure on the local currency. On July 29, the Federal Executive Council approved President Bola Tinubu’s directive for NNPC to sell crude oil to the Dangote Refinery and other refineries in naira.

The minister concluded that this move would reduce unnecessary transaction costs and improve the availability of petroleum products across Nigeria.