Fuel Crisis Escalates Marketers Ditch NNPC, Source Petrol Directly From Dangote

Fuel Crisis Escalates Marketers Ditch NNPC, Source Petrol Directly From Dangote

The Dangote Petroleum Refinery has initiated direct sales of Premium Motor Spirit (PMS), commonly known as petrol, to select oil marketers, circumventing the Nigerian National Petroleum Company Limited (NNPC).…..CONTINUE READING 

Reports indicate an increasing number of marketers interested in procuring PMS directly from the refinery, while others continue to import petrol, with hundreds of millions of liters set to arrive in Nigeria soon.

According to The PUNCH, 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 nationwide fuel supply.

This move from marketers complements the output from the $20 billion Dangote refinery, further bolstering the market. Marketers have begun lifting PMS directly from the Dangote facility in Lekki, Lagos, marking a significant shift in Nigeria’s fuel supply chain.

A senior official at the refinery explained that this direct purchase arrangement operates on a willing-buyer, willing-seller basis, allowing marketers to bypass third-party suppliers. “Marketers are already coming to the refinery to lift PMS directly, and agreements have been made with some marketers. If the price wasn’t favorable, they wouldn’t be coming to us,” the official stated, indicating that Dangote’s pricing is competitive.

“Some of the trucks you saw there today were from marketers purchasing the product directly from Dangote, without recourse to NNPC. So the direct sale has started,” another source confirmed.

Officials revealed that around 53% of the refinery’s crude oil supply is dedicated to PMS production, responding to high demand for petrol both in Nigeria and other countries. The proportion of crude allocated to PMS may be adjusted if demand for other products rises, but for now, petrol remains the primary focus.

When asked if marketers had begun purchasing petrol directly from Dangote without involving NNPC, a major marketer affirmed this. “Yes, everyone is in the process. This was advised that it would happen soon and is a normal business transaction,” the source noted.

This direct sale initiative follows earlier assertions that NNPC would be the exclusive 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 buy PMS directly from local refineries, promoting competition and enhancing market efficiency.

While some officials from the Independent Petroleum Marketers Association of Nigeria (IPMAN), led by Vice President Hammed Fashola, continue to discuss logistics and modalities for lifting PMS from Dangote, refinery officials have confirmed that direct sales to certain marketers have already begun.

Meanwhile, the refinery has refuted claims that it sold PMS to NNPC at N898 per liter when sales commenced in mid-September, describing such reports as misleading. The refinery asserts 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.