NNPC Terms Push Dangote Refinery Toward Exporting Petrol, Local Market At Risk

NNPC Terms Push Dangote Refinery Toward Exporting Petrol, Local Market At Risk

The Dangote refinery may shift to exporting its Premium Motor Spirit (petrol) due to the Nigerian National Petroleum Company Limited’s (NNPC) refusal to be its sole buyer. NNPC spokesperson Olufemi Soneye stated on Saturday that the corporation would only purchase Dangote’s fuel if it was cheaper than international prices. This contradicts Dangote Group President Aliko Dangote’s claim that the refinery was waiting for NNPC to distribute its product……CONTINUE READING 

The NNPC clarified that it would only fully offtake petrol from Dangote Refinery if the price of petrol in the international market exceeded Nigeria’s pump prices. The company emphasized that Dangote and other refineries were free to sell to any marketer on a willing buyer, willing seller basis, as NNPC had no plans to act as a distributor in a deregulated market.

This response came after allegations from the Muslim Rights Concern (MURIC) that NNPC was undermining the refinery by being its sole buyer. MURIC argued that the NNPC’s recent price changes would prevent Dangote from offering competitive rates, while the NNPC maintained that fuel prices are determined by global market forces.

Despite Dangote’s initial expectations of rolling out petrol once the NNPC was ready, talks between the two entities seem to have stalled, with Dangote officials hinting at the possibility of exporting their product. Dangote Vice President of Oil and Gas, Devakumar Edwin, expressed frustration over local market challenges and suggested that if NNPC and other traders didn’t buy their petrol, they would resort to exports, just as they are doing with jet fuel and diesel.

Edwin lamented the unexpected difficulties faced by the refinery, which was built to add value to local raw materials. He also noted that despite having the capacity to load 2,900 tankers per day, local patronage had been disappointingly low.

Meanwhile, Professor Adeola Adenikinju, an economics expert, urged the government and NNPC to purchase from the Dangote refinery, arguing that it would be cheaper than importing from Europe. The Independent Petroleum Marketers Association of Nigeria (IPMAN) also expressed readiness to buy petrol from Dangote, regardless of NNPC’s position.