Three Refineries Set To Produce PMS, Dangote Refinery Anticipates NNPC Crude Supply

Three Refineries Set To Produce PMS, Dangote Refinery Anticipates NNPC Crude SupplyThe Nigerian National Petroleum Company Limited (NNPC) may begin supplying crude oil in naira to the Dangote Petroleum Refinery this week, following the Federal Government’s announcement that the naira-for-crude deal is now in effect.

Additionally, three other refineries are preparing to start producing Premium Motor Spirit (PMS), also known as petrol. These refineries include the 11,000 barrels-per-day Aradel refinery in Rivers State, the 20,000-capacity Clairgold refinery in Delta State, and the 12,000-capacity Azikel refinery in Bayelsa. Officials from the $20bn Dangote refinery and other local refineries confirmed that while the naira-for-crude deal has begun, the first crude delivery to Africa’s largest refinery is expected this week.

The Federal Government, in a post by the Ministry of Finance on its X handle, announced that the sale of crude oil and refined products in naira officially commenced on October 1, 2024. This move is seen as a way to reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products in the country.

Officials at Dangote Refinery praised the government’s initiative and confirmed that once the first crude cargo arrives, they will document the delivery for record-keeping. The initial phase of the naira-for-crude deal is set to last six months, with the supply of about 385,000 barrels per day to Dangote being paid for in naira. In return, the refinery will supply petrol and diesel to the local market, with PMS going exclusively to NNPC for resale.

Meanwhile, the modular refineries in Rivers, Delta, and Bayelsa are upgrading their facilities to produce PMS, marking a significant shift from diesel production. The Crude Oil Refinery Owners Association of Nigeria and the Petroleum Retail Outlet Owners Association of Nigeria have welcomed the initiative, although they call for more transparency on the specifics of the deal. They believe this could end Nigeria’s reliance on imported petrol.

Documents from NNPC revealed that between September 15 and 30, the company lifted over 102.9 million litres of petrol from Dangote refinery. However, this fell short of the 400 million litres targeted, achieving only a 25.74% transaction performance. Despite this, the ongoing supply from Dangote refinery is expected to ease fuel scarcity and improve economic activities in the country.

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