Why NNPC halted petrol imports by marketers in Nigeria

• The Nigerian National Petroleum Company Limited (NNPC) has reportedly asked marketers to halt petrol imports
• The NNPC said that the marketers can only import petrol if the Dangote Refinery is unable to meet local supply needs
• The directive reportedly came during a high-level meeting between the NNPC, the oil marketers and the NMDPRA

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian National Petroleum Company Limited (NNPC) has directed oil marketers to halt petrol imports, stating that the Dangote Refinery has sufficient capacity to meet domestic needs.

According to reports, the directive came amid a high-level meeting in Abuja attended by NNPC Group CEO Mele Kyari, representatives of the Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMAN), and key stakeholders.

NNPC Group CEO Mele Kyari gives orders to cease petrol imports Credit: Bloomberg/Contributor
Source: Getty Images

No more petrol imports until further notice

Representatives of 11 PLc, Matrix, AA Rano, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) were also present at the meeting.

Sources privy to the negotiation said the NNPC categorically asked the stakeholders that all supply would now be based on clearance from the Dangote Refinery.

BusinessDay quoted an official in attendance at the meeting that the NNPC stressed that no marketer would be allowed to import petrol without specific clearance tied to Dangote Refinery’s capacity in the future.

According to the report, the decision raised concerns among the marketers, who expressed worry over the refinery’s ability to meet and sustain a consistent supply nationwide.

Marketers raise concerns over new directive

The marketers reportedly questioned the refinery’s production and logistics preparedness to handle fluctuating domestic demands.

Another issue raised at the meeting was the payment structure proposed by the mega refinery, which mandates marketers to settle payments upon product arrival at the depots.

The system also demands advance payment, which raises concerns about cash flow and operational feasibility for smaller players in the downstream sector.

IPMAN reaches agreement with Dangote Refinery

Since its January opening, the $20 billion refinery has sold diesel, aviation fuel, and other petroleum products, primarily to traders from Vitol, Trafigura, and the international energy firm BP.

Legit.ng earlier reported that the refinery also agreed with the Independent Petroleum Marketers Association of Nigeria (IPMAN) to lift 60 million litres of petrol weekly.

Also, NNPC and other significant marketers imported over 2 billion litres of petrol between October and November.

Filling stations slash petrol prices as landing cost falls

Legit.ng earlier reported that data from the Major Energy Marketers Association of Nigeria (MEMAN) shows that the landing cost of imported petrol has declined slightly to N975 per litre.

The adjustment shows a decrease from the previous rate of N977 per litre when calculated at an exchange rate of N1,658.93 to a dollar.

The spot landing cost also reduced slightly to N938 per litre, showing modest improvements caused by FX rate stability and supply dynamics.

Source: Legit.ng