95% Of Our Petrol Production Must Be Exported, Says Dangote Refinery

95% Of Our Petrol Production Must Be Exported, Says Dangote Refinery

Dangote Refinery has revealed that it is compelled to export 95-97% of its Premium Motor Spirit (petrol) due to limited demand from Nigerian marketers. This disclosure was made by Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, during a session on X Spaces hosted by Nairametrics.

Edwin explained that despite the refinery’s large production capacity, only 2-3% of its petrol is purchased by local oil marketers willing to do business with the refinery. As a result, the refinery is left with no option but to export the majority of its petrol output.

“I’m selling 2 to 3 percent to small traders who are willing to buy, while the rest 95 to 97 percent I’m forced to export,” Edwin stated, highlighting the challenges posed by the lack of local patronage.

This development comes amid concerns over the Nigerian National Petroleum Corporation Limited’s (NNPCL) plan to lift Dangote Refinery’s fuel, with no clear strategy in place as the agreed date approaches.

NNPC Requests Office Space at Dangote Refinery

In a related development, the Nigerian National Petroleum Corporation Limited (NNPCL) has requested permanent office space for about 10 of its staff at the Dangote Refinery. This is part of an agreement involving the supply of crude oil to the refinery.

During the same X Space event, Edwin explained that the NNPC’s request is linked to its responsibility for supplying crude oil to the refinery, overseeing the production process, and repurchasing refined products in Naira.

“NNPC has informed us that they intend to station a team of 6 to 10 people permanently at our refinery. They’ve asked us to provide office space for them since they will be supplying the crude, overseeing the production, and buying back the products in Naira,” Edwin said.

Negotiations Ongoing Over Crude Oil Pricing

Edwin further disclosed that Dangote Refinery is currently in negotiations with the Nigerian government concerning the pricing structure for crude oil, the mechanism for determining prices, and the exchange rate for transactions in Naira. No final agreement has been reached, as several details remain under discussion.

In a gesture of support for the nation, Aliko Dangote has agreed to sell NNPCL’s refined products back to the government in Naira, despite the potential financial losses due to currency fluctuations. According to Edwin, Dangote expressed his willingness to bear the cost for the benefit of the country.

“Dangote said we are going to accept this because the country desperately needs foreign exchange, and the value of the Naira is deteriorating every day,” Edwin quoted.