The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that it has supplied 30 million barrels of crude oil to the Dangote Refinery, the country’s largest private refinery.
This announcement came from the Executive Vice President of NNPCL Downstream, Adedapo Segun, during an interview on Arise Television on Thursday.
Segun further revealed that an additional 17 million barrels of crude oil will be delivered to the refinery in the coming months.
According to Segun, NNPCL plans to supply 6.3 million barrels of crude in September and 11.3 million barrels in October.
He emphasized that these deliveries are part of the Federal Government’s broader strategy to promote local refining and reduce Nigeria’s dependence on imported petroleum products.
“We have supplied about 30 million barrels to Dangote so far. For this month, we will deliver 6.3 million barrels, and by October, an additional 11.3 million barrels will be supplied,” Segun confirmed.
He went on to explain that the 6.3 million barrels being delivered in September would arrive in seven separate cargo shipments.
This approach highlights the government’s commitment to ensuring that the Dangote Refinery is adequately supported as it ramps up operations.
The Dangote Refinery, situated in Lagos and expected to refine 650,000 barrels of crude oil per day at full capacity, represents a significant shift in Nigeria’s energy sector.
By boosting local refining, the refinery is set to reduce Nigeria’s reliance on imported fuel and help stabilize fuel prices.
The NNPCL’s supply of crude to the refinery aligns with the government’s broader objective of reducing the country’s fuel importation costs.
Nigeria, despite being one of the world’s largest oil producers, has historically relied on imported refined petroleum products to meet domestic demand, due to limited refining capacity within the country.
The partnership between NNPCL and Dangote is expected to significantly address this issue, positioning the country to benefit from domestically refined products.
This move is also part of the government’s efforts to drive local content and boost domestic industrial capacity.
In the same interview, Segun also addressed the issue of the pump price of Premium Motor Spirit (PMS), commonly referred to as petrol.
He noted that the current price of petrol at filling stations does not reflect market realities, given that NNPCL remains the sole importer of petrol in the country.
“The pump price today is not reflective of the market. NNPCL is the sole importer of Premium Motor Spirit (PMS) in the country, which is abnormal.
“We should be moving towards a situation where the free market determines prices,” Segun remarked.
Segun clarified that NNPCL’s role as the sole importer of petrol was not by choice, but rather due to market conditions.
He explained that the company had stepped in when private sector participants reduced their involvement in fuel importation, thus preventing a fuel shortage in the country.
“Let me put it into proper perspective. NNPC is not a regulator. We didn’t choose to be the sole importer. We don’t determine who participates in the market.
“We stepped in when others reduced their participation. It is not about us wanting to be monopolists,” he explained.
According to him, a stable fuel supply and pricing mechanism require more ideal market conditions.
One of the key factors needed, Segun mentioned, is a more liquid and accessible foreign exchange (FX) market, which would allow private players to import fuel at competitive rates.
The issue of fuel pricing has long been a contentious one in Nigeria, with petrol subsidies playing a significant role in distorting the market.
In June 2023, the Nigerian government officially removed fuel subsidies, a move that led to a sharp increase in the pump price of petrol.
However, even with subsidy removal, fuel prices remain a challenge, largely due to foreign exchange constraints.
Many private companies have been unable to compete in the importation of petrol due to the high cost of securing foreign currency, leaving NNPCL as the sole importer.
Segun’s remarks suggest that NNPCL is keen to step back from this role, but only when market conditions improve.
He stressed the importance of economic reforms, particularly in the foreign exchange market, to enable a competitive and sustainable fuel market in the country.
“Market conditions need to be ideal, and there needs to be FX liquidity,” he noted, pointing to the need for broader economic policies to address the underlying challenges in Nigeria’s fuel supply chain.
