Dangote Refinery Starts Direct Petrol Sales to Marketers, Bypassing NNPC
Detailed Breakdown:
The Dangote Petroleum Refinery has begun supplying Premium Motor Spirit (PMS), commonly known as petrol, directly to oil marketers. This development marks a shift from the previous arrangement where the Nigerian National Petroleum Company Limited (NNPC) acted as the intermediary.
According to inside sources at the refinery, oil marketers can now engage in direct business transactions with Dangote Refinery on a willing-buyer, willing-seller basis. This direct sale has already seen marketers lifting PMS from the refinery, with more expected to follow suit as demand grows. Though the exact pricing of these direct transactions remains undisclosed, it is believed to be competitive enough to attract buyers.
In parallel with this development, Nigeria is also preparing for an influx of imported PMS, with about 123.4 million liters expected to arrive at seaports in the coming weeks. This combination of domestic production and importation aims to improve the overall supply of petrol across the country.
While some industry observers previously believed the refinery’s contract with NNPC would prevent direct sales, these concerns were laid to rest by an October 11 announcement from the Federal Government’s Technical Subcommittee on Domestic Sale of Crude Oil. The statement clarified that oil marketers could now directly purchase PMS from refineries, promoting competition and market efficiency.
In response, marketers are approaching the refinery to discuss logistics and start lifting products. Additionally, major players such as the Independent Petroleum Marketers Association of Nigeria (IPMAN) have expressed interest in working with the refinery.
Though the NNPC initially stated it purchased petrol from the refinery at N898/litre in mid-September, the refinery denied this claim. It reiterated that the price would be set by the government’s naira-for-crude committee, which has not yet finalized the pricing.
As the refinery continues to sell directly to marketers, it currently allocates 53% of its crude oil supply to PMS production, with the rest being processed into other petroleum products. This allocation may shift as market demands evolve.
In summary, Dangote Refinery’s direct sale of petrol to marketers is a significant move that could reshape Nigeria’s fuel distribution landscape, enhancing market competition and reducing the dominance of NNPC in fuel transactions.
Detailed Breakdown:
The Dangote Petroleum Refinery has begun supplying Premium Motor Spirit (PMS), commonly known as petrol, directly to oil marketers. This development marks a shift from the previous arrangement where the Nigerian National Petroleum Company Limited (NNPC) acted as the intermediary.
According to inside sources at the refinery, oil marketers can now engage in direct business transactions with Dangote Refinery on a willing-buyer, willing-seller basis. This direct sale has already seen marketers lifting PMS from the refinery, with more expected to follow suit as demand grows. Though the exact pricing of these direct transactions remains undisclosed, it is believed to be competitive enough to attract buyers.
In parallel with this development, Nigeria is also preparing for an influx of imported PMS, with about 123.4 million liters expected to arrive at seaports in the coming weeks. This combination of domestic production and importation aims to improve the overall supply of petrol across the country.
While some industry observers previously believed the refinery’s contract with NNPC would prevent direct sales, these concerns were laid to rest by an October 11 announcement from the Federal Government’s Technical Subcommittee on Domestic Sale of Crude Oil. The statement clarified that oil marketers could now directly purchase PMS from refineries, promoting competition and market efficiency.
In response, marketers are approaching the refinery to discuss logistics and start lifting products. Additionally, major players such as the Independent Petroleum Marketers Association of Nigeria (IPMAN) have expressed interest in working with the refinery.
Though the NNPC initially stated it purchased petrol from the refinery at N898/litre in mid-September, the refinery denied this claim. It reiterated that the price would be set by the government’s naira-for-crude committee, which has not yet finalized the pricing.
As the refinery continues to sell directly to marketers, it currently allocates 53% of its crude oil supply to PMS production, with the rest being processed into other petroleum products. This allocation may shift as market demands evolve.
In summary, Dangote Refinery’s direct sale of petrol to marketers is a significant move that could reshape Nigeria’s fuel distribution landscape, enhancing market competition and reducing the dominance of NNPC in fuel transactions.