The federal government has confirmed that Dangote Petroleum Refinery will commence the distribution of premium motor spirit (PMS), also known as petrol, on Sunday.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun spoke on Friday at a press conference in Abuja.
The minister, who was represented by Zacch Adedeji, executive chairman of the Federal Inland Revenue Service (FIRS), said all agreements have been completed for the loading of the first batch of petrol.
“I am glad to announce that all agreements have been completed and loading of the first batch of PMS from the Dangote Refinery will commence on Sunday, September 15,” Edun said.
The minister said the Nigerian National Petroleum Company (NNPC) Limited will supply about 385,000 barrels of crude oil per day (bpd) to the Dangote refinery starting next month.
“From October 1, NNPC Ltd. will commence the supply of about 385,000 bpd of crude oil to the Dangote refinery, to be paid for in naira,” he said.
“In return, the Dangote refinery will supply PMS and diesel of equivalent value to the domestic market, to be paid in naira.
Edun also said the Dangote refinery will sell petrol to only NNPC, noting that interested marketers would have to buy the product from NNPC Trading.
However, the minister said the Dangote refinery can sell diesel to any off-taker.
“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC, NNPC will then sell to various marketers for now,” he said.
TheNewsMatrics learnt that pump price of petrol will remain unchanged despite the introduction of its product into the market confirming speculations that the increase in petrol pump price by the NNPC was to pave way for Dangote’s entry without the element of subsidy.
The initial daily allocation is expected to be 25 million litres, delivered through the NNPC Trading Limited at a cost of N765.99 to marketers.
“NNPC Trading Limited will continue to import a shortfall of 15 million litres to meet Nigeria’s daily demand for petrol estimated at 40-50 million litres a day,” a source close to the discussions said.
The source added, “Each marketer will take a maximum of 50 trucks daily; They will buy at a price of N765.99 through the NNPC Trading Limited, including their costs movement and sell at the current pump price of N855 to N897 depending on the location per litre”.
To ensure a smooth transition, marketers have been instructed to start sending their trucks to the refinery today to facilitate the lifting process.
He added, “Next month Dangote refinery will move to a daily allocation of 30 million litres from then marketers will be picking by vessels”.
The latest development contradicts NNPC’s claim on September 7 that it does not intend to be the sole distributor of petrol produced by the Dangote refinery.
The minister also said all associated regulatory costs pertaining to the Nigeria Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA) and others would also be paid for in naira.
“We are also setting up a one-stop shop that will coordinate service provision from all regulatory, and security agencies, and other stakeholders to ensure a smooth implementation of this initiative. This will be located in Nigeria Ports Authority (NPA), Lagos,” Edun said.
“The technical committee that worked to flesh out this initiative will transition to an implementation execution and monitoring committee that will be working out of Lagos for the next three to six months.”
Speaking on the approval to sell crude oil to local refineries in naira and purchase petrol from the refiners in the local currency, Edun said the decision would reduce pressure on the local currency.
On July 29, the federal executive council (FEC) approved a proposal by President Bola Tinubu directing the NNPC to sell crude oil to the Dangote refinery and other refineries in naira.
The minister said the move would also eliminate unnecessary transaction costs, and improve the availability of petroleum products in the country.
According to Edun, the implementation committee chaired by him, and the other technical committee had worked intensely with the NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the approval by the FEC.
Edun thanked Tinubu for championing the initiative and assured the president that he could count on the committee to implement his vision.
