The Federal Government has announced that the Nigerian National Petroleum Company Limited (NNPCL) will be the sole buyer of Premium Motor Spirit (PMS) from Dangote Refinery. Under this new arrangement, independent marketers interested in purchasing the product must do so through NNPCL’s trading company.
This decision forms part of a broader agreement reached between the government and Dangote Refinery regarding the supply of crude oil to the refinery and the distribution of petrol and diesel from the facility. The agreement also outlines the commercial terms for these transactions.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, disclosed this during a press briefing in Abuja. He was represented by Dr. Zaccheus Adedeji, the Executive Chairman of the Federal Inland Revenue Service.
This development, however, appears to contradict an earlier statement by NNPCL, which had said it would not be the sole distributor of petrol produced by Dangote Refinery. The new directive could also mean that the government retains control over petrol pricing, as it will be based on the agreement between the refinery and the government.
The refinery is set to begin distributing petrol on Sunday, September 15, 2024, with an initial daily supply of 25 million litres. Edun stated, “All agreements have been finalized, and the first batch of PMS will be loaded on Sunday. From October 1, NNPCL will begin supplying crude oil to Dangote Refinery, to be paid for in naira. In return, Dangote Refinery will provide PMS and diesel of equivalent value to the domestic market, also to be paid for in naira.”
For now, PMS will be sold exclusively to NNPCL, which will then distribute it to various marketers. Meanwhile, diesel will be sold by Dangote Refinery to any interested buyer, also in naira.
Edun further emphasized that all regulatory costs, including those associated with the Nigeria Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), will also be settled in naira. A technical committee responsible for developing the initiative will now transition into an “Implementation, Execution, and Monitoring Committee” to oversee the process over the next three to six months.
The move to settle transactions in naira, Edun noted, is part of a broader effort to ease pressure on the local currency and reduce unnecessary transaction costs. This policy follows the Federal Executive Council’s approval on July 29, 2024, of President Bola Tinubu’s directive for NNPCL to sell crude oil to Dangote Refinery and other local refineries in naira. The initiative is expected to enhance the availability of petroleum products in Nigeria while stabilizing the economy.
