See why Dangote refinery will sell petrol only to NNPCL

• The federal government has announced that NNPC Limited will be the sole buyer of Dangote refinery petrol
• There is an agreement with the government and the Dangote refinery for crude oil supply and then petrol
• Dangote Refinery is now ready to begin the distribution of petrol, starting with 25 million litres of petrol daily

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Federal Government has confirmed Sunday, September 15, 2024, as the date the Dangote Refinery will begin the distribution of petrol.

The commencement was delayed due to negotiations on pricing and supply arrangements by the Dangote Refinery and the Presidential Committee on the Sale of Crude Oil and Refined Products.

FG says Dangote refinery to begin petrol sale to NNPC Photo credit: Bloomberg/contributor
Source: Getty Images

The agreement was finalised on Friday with the Nigerian National Petroleum Company Limited (NNPCL) to serve as the sole off-taker of petrol produced by the Dangote Refinery, with other marketers purchasing the product directly from NNPCL.

Explaining further the agreement Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS) and a member of the Presidential Committee on the Sale of Crude Oil and Refined Products, revealed that NNPCL will start supplying 385,000 barrels of crude oil per day to the Dangote Refinery starting October 1, 2024 in naira.

His words:

“All agreements have been completed, and loading of the first batch of Premium Motor Spirit (PMS) from the Dangote Refinery will commence on Sunday, September 15."

He also disclosed that the Dangote Refinery will supply petrol and diesel to the domestic market, with payments for both products to be made in naira.

Adedeji elaborated on the terms of the deal, stating that while the refinery’s diesel will be available for purchase by any interested off-taker, petrol will be sold exclusively to NNPCL, which will then distribute the product to marketers.

His words

“From October 1, NNPCL will begin the supply of approximately 385,000 barrels of crude oil per day to the Dangote Refinery, to be paid for in naira. “In return, the refinery will supply PMS and diesel of equivalent value to the domestic market, also payable in naira.Diesel will be sold in Naira by the Dangote Refinery to any interested off-taker, while PMS will be sold only to NNPCL. NNPCL will then distribute the petrol to various marketers, with all associated regulatory costs also being paid in Naira.”

This agreement is expected to alleviate the ongoing petrol shortage across Nigeria and ensure a steady supply of the product.

Additionally, it allows the government to maintain its fuel subsidy scheme, which has been a contentious issue in recent months due to the rising cost of imported fuel.

Dangote refinery import 11 million barrels of crude from US

Legit.ng previously reported that while looking to begin production in July, the Dangote refinery imported 11 million barrels of crude oil from the US.

The refinery has placed a tender for five million barrels of West Texas Crude and another six million barrels for September.

The refinery management has accused international oil companies (IOCs) of inflat me4123`3`ing premium prices above international costs.

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Source: Legit.ng