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Fuel Price Hike: Dangote Refinery Initiates Direct Petrol Supply to Marketers, Bypassing NNPC
The Dangote Petroleum Refinery has started supplying Premium Motor Spirit (PMS), commonly known as petrol, directly to certain oil marketers, bypassing the Nigerian National Petroleum Company Limited (NNPC).
Reports indicate that an increasing number of marketers are looking to buy PMS directly from the refinery, while others continue to import the product. Hundreds of millions of liters of imported petrol are expected to arrive in Nigeria in the coming weeks.
EKO HOT BLOG reported that at least four vessels carrying imported PMS docked at Nigerian ports between October 18 and October 20, unloading approximately 123.4 million liters at two seaports to help stabilize the national fuel supply.
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This shift by marketers coincides with the output from the $20 billion Dangote refinery, providing additional support to the market. Marketers have begun lifting PMS directly from the Dangote plant in Lekki, Lagos, marking a significant change in Nigeria’s fuel supply chain.
According to a senior official at the refinery, this direct purchase arrangement operates on a willing-buyer, willing-seller basis, enabling oil marketers to engage directly with the refinery and bypass third-party suppliers. “Marketers are already coming to the refinery to lift PMS directly, and agreements have been established with some of them. If the pricing weren’t favorable, they wouldn’t be approaching us,” the official explained.
“Some of the trucks you saw there today were from marketers purchasing the product directly from Dangote, without involving NNPC. So, the direct sale has begun,” another source confirmed to The PUNCH.
Officials also noted that the refinery is dedicating about 53% of its crude oil supply to PMS production in response to high demand for petrol both in Nigeria and abroad. This proportion may be adjusted in the future if demand for other products rises, but for now, petrol remains the primary focus.
“This could be reviewed in the future if the demand for other finished products increases more than the demand for petrol. Currently, approximately 53% of our crude is allocated to petrol production, while the remainder goes to other products,” the official stated.
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When asked whether marketers had commenced direct purchases of petrol from Dangote without involving NNPC, a prominent marketer confirmed this was indeed the case. “Yes, everyone is in the process. It was advised that this would happen soon, and it’s a normal business transaction,” the source stated.
This initiative follows earlier claims that NNPC would be the sole off-taker of PMS from the Dangote refinery starting September 15. However, a recent announcement from the Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency, led by Finance Minister Wale Edun, confirmed that marketers can now purchase PMS directly from local refineries, promoting competition and enhancing market efficiency.
While some officials from the Independent Petroleum Marketers Association of Nigeria (IPMAN), including Vice President Hammed Fashola, are still negotiating logistics and modalities for lifting PMS from Dangote, refinery officials confirmed that direct sales to select marketers have already begun.
Meanwhile, the refinery has rejected claims that it sold PMS to NNPC at N898 per liter when sales commenced in mid-September, labeling such reports as misleading. The refinery insists that the official naira-for-crude committee will eventually announce the product’s price, but as of October 22, no such announcement has been made.
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