Dangote refinery ready for petrol sale
The Dangote Petroleum Refinery is poised to commence the distribution of Premium Motor Spirit (PMS), commonly known as petrol. This development follows a recent test-run of the product at the refinery, which boasts a capacity of 650,000 barrels.
Industry insiders have confirmed that the petrol will soon become available on the market. These sources, who chose to remain anonymous, indicated that both the government and Dangote Group are finalizing the distribution framework.
A government insider revealed that the Federal Government is currently finalizing arrangements for the sale and distribution of the PMS. At this stage, the Nigerian National Petroleum Company Limited (NNPCL) will be the sole authorized seller of Dangote’s petrol.
It’s worth noting that the rollout of Dangote’s petrol was initially anticipated for June. However, the refinery faced challenges including a shortage of crude oil and a dispute with the Nigerian Midstream and Downstream Regulatory Authority (NMDRA), which had accused the refinery of producing substandard diesel.
The intervention of the Federal Government, which mandated the supply of crude oil in local currency, appears to be making progress. There have been ongoing accusations from Dangote and other local refineries that international oil companies have been reluctant to sell crude oil to local refineries.
The Federal Government has recently announced that a crude oil supply agreement will begin in October. Dangote Group has also claimed that international oil companies prefer selling crude oil to their foreign agents, leading to higher local prices due to a markup of $2 to $4 per barrel above the official price set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
In recent disputes, the Dangote refinery had a confrontation with the NUPRC over the alleged supply of 29 million barrels of crude oil. Dangote accused the NUPRC of failing to enforce domestic crude supply regulations effectively, resulting in insufficient local crude supply.
The NUPRC responded by stating that it had facilitated the supply of over 29 million barrels of crude oil to the Dangote refinery from January to June 2024 through its monthly production curtailment platform. However, Dangote Group swiftly countered that it had not received these quantities of crude.
Anthony Chiejina, spokesperson for the Dangote Group, acknowledged the NUPRC’s statement but emphasized that the refinery had only received one cargo of domestic crude oil, with the rest sourced from international traders. He also reiterated the refinery’s preference for purchasing crude directly from Nigerian producers rather than through international intermediaries.
As the situation unfolds, there is growing public optimism that the Dangote refinery will lead to a reduction in the pump price of PMS.
