The Federal Government of Nigeria has announced that the Nigerian National Petroleum Company Limited (NNPCL) will be the sole buyer of Premium Motors Spirit (PMS) from Dangote Refinery.
It also noted that interested marketers would have to buy the product from the national oil firm through its trading company.
This was part of the agreement reached with the management of Dangote Refinery on the commercial terms for the supply of crude oil to the refinery and the off-taking and distribution of petrol and diesel from the facility.
The Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, on Friday disclosed this at a press briefing in Abuja.
The latest development, however, contradicts NNPC’s claim in a statement early this month that it does not intend to be the sole distributor of petrol produced by the Dangote refinery.
The directive also implies that the government can still control the pricing of the product as it would be based on the agreement between the government and the refinery.
The minister, represented by the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacceus Adedeji, also announced that Dangote refinery will commence the distribution of petrol to marketers on Sunday with an initial 25 million litres per day.
He said, “I am glad to announce that all agreements have been put in place, and the loading of the first batch of PMS, as already announced by NNPC, will commence on Sunday, September 15, 2024. And from October 1, NNPC will commence the supply of crude oil to Dangote Refinery to be paid for in naira. In return, Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market to be paid for in naira.”
“But for now, PMS will only be sold to NNPC. NNPC will then sell to various marketers.”
The minister also said all associated regulatory costs pertaining to the Nigeria Ports Authority, Nigerian Maritime Administration and Safety Agency and others would also be paid for in naira.
“Diesel will be sold in naira by Dangote Refinery to any interested off-taker. All associated regulatory costs -NPA, NIMASA, Federal Inland Revenue and all other Regulatory fees that are associated with this transaction will be paid in naira.
“The technical committee that worked to flesh out this initiative, I mean this committee will transition to an implementation, Execution and Monitoring Committee that will be working out of the Lagos for the next three to six months,” he added.
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 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.
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