The Federal Government has announced that the Dangote Petroleum Refinery will begin distributing premium motor spirit (PMS), also known as petrol, starting this Sunday.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, made the announcement during a press conference in Abuja on Friday. Edun, represented by Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), confirmed that all necessary agreements have been finalized for the initial petrol load from the refinery.
“I am pleased to announce that all agreements are completed, and the loading of the first batch of PMS from the Dangote Refinery will commence on Sunday, September 15,” Edun stated.
According to the minister, the Nigerian National Petroleum Company (NNPC) Limited will begin supplying approximately 385,000 barrels of crude oil per day to the Dangote Refinery starting from October 1, 2024. This crude oil will be paid for in naira.
“In return, the Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market, also paid in naira,” Edun added.
The new arrangement dictates that the Dangote Refinery will sell petrol exclusively to NNPC. Interested marketers will need to purchase the petrol through the national oil company. Diesel, however, will be available for purchase by any interested off-taker.
“Diesel will be sold in naira by the Dangote Refinery to any interested off-taker. But for PMS, only NNPC will be the seller. NNPC will then distribute to various marketers,” Edun explained.
This announcement comes amid confusion and some contradictory statements. On September 7, NNPC had indicated that it did not plan to be the sole distributor of the refinery’s petrol. However, the recent decision by the Federal Government clarifies that NNPC will be the exclusive buyer of the petrol produced by Dangote Refinery.
Edun also highlighted that all regulatory costs associated with the Nigeria Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), and other relevant bodies would be settled in naira.
“We are establishing a one-stop shop at the Nigeria Ports Authority in Lagos to coordinate services from all regulatory, security agencies, and stakeholders to ensure smooth implementation,” Edun said.
The minister revealed that the technical committee, which developed this initiative, would now transition into an implementation and monitoring committee based in Lagos for the next three to six months.
The Dangote Refinery, one of Africa’s largest, is a significant addition to Nigeria’s oil sector. Its capacity to refine large quantities of petrol is expected to impact the country’s fuel supply positively.
The Federal Government’s decision to have NNPC as the sole buyer of Dangote Refinery’s petrol aims to streamline distribution and maintain control over the domestic market. This move is also expected to reduce costs and pressures on the local currency, which has been a point of concern in recent times.