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NNPC Still Sole Off-taker For Dangote Petrol, Marketers Insist

2 weeks ago
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NNPC Retains Control Despite Government Directive

The Nigerian National Petroleum Company Limited (NNPC) remains the sole off-taker of Premium Motor Spirit (PMS) from the Dangote Petroleum Refinery, despite a recent directive by the Federal Government allowing other oil marketers to purchase directly from the refinery. The government had announced on October 11, 2024, that oil marketers were now free to negotiate with Dangote Refinery for petrol supplies without NNPC’s intermediary role. However, oil marketers disclosed on Wednesday that the NNPC will continue in this role until the agreement with Dangote Refinery is terminated.

An official from the Independent Petroleum Marketers Association of Nigeria (IPMAN) said, “We had a very fruitful discussion with the Dangote Refinery. Although the government has issued a directive, the NNPC’s deal with Dangote still stands. This means direct purchases by marketers are on hold until the agreement is resolved.”

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Government Directive on PMS Sales

On October 11, 2024, the Federal Government announced a shift in the way Premium Motor Spirit (PMS), popularly called petrol, would be sold by local refineries, especially the Dangote Refinery. In a statement from the Ministry of Finance, oil marketers were informed that they were now free to purchase petrol directly from local refineries, bypassing the NNPC’s intermediary role.

“Moving forward, petroleum product marketers can now purchase PMS directly from local refineries without NNPC being an intermediary. This move is intended to boost competition and improve market efficiency,” the government said in its statement.

The government’s directive was expected to open the market and allow other marketers to freely lift PMS from the Dangote Refinery. However, the ongoing agreement between NNPC and the refinery means that the NNPC retains its control as the sole off-taker for the time being.

NNPC Agreement Still in Force

Oil marketers, including members of IPMAN, met with officials of the Dangote Group on October 15, 2024, to discuss the possibility of direct purchases. During the meeting, the Vice President of Dangote Group acknowledged the government directive but also pointed out that the existing agreement between NNPC and the refinery must first expire or be terminated before any changes take effect.

READ ALSO: NNPC, Dangote Refinery And The Politics Of Petrol Pricing: Where Are We?

In a notice to IPMAN members in the Western Zone, Dele Tajudeen, the Zonal Chairman, emphasised the situation. He stated, “Until and when the agreement is terminated by either party, the direct sales will still be on hold.” This notice, issued to the association’s members, highlighted that only officially registered IPMAN members would benefit from the opportunity to purchase PMS directly from the Dangote Refinery once the NNPC’s role as sole off-taker ends.

Deal Between NNPC and Dangote Refinery

Major oil marketers have confirmed that they continue to lift petrol from the Dangote Refinery through the existing deal between NNPC and Dangote Refinery. A senior oil dealer, who requested anonymity, said, “There is a subsisting deal between NNPC and Dangote Refinery. We major marketers are lifting PMS from the refinery based on this deal using a proforma invoice (PFI).”

The Dangote Refinery, which cost $20 billion and is located in the Lekki Free Zone, is one of Africa’s largest refineries and has been positioned to be a key player in Nigeria’s petroleum supply. The refinery’s collaboration with NNPC has given the national oil company significant control over the distribution of petrol from the plant.

Despite inquiries, both NNPC and Dangote officials have not publicly stated when the current agreement will end or if negotiations to end the deal are ongoing.

IPMAN Prepares for Potential Change

As the industry waits for further developments, IPMAN is urging its members to ensure they are properly registered with the association to benefit from future opportunities at the Dangote Refinery.

“In view of this, marketers who are yet to officially register as IPMAN members should do so without wasting time, as such marketers will not benefit from this opportunity when we eventually commence lifting from the Dangote refinery,” the IPMAN notice added.

While oil marketers eagerly anticipate greater access to petrol directly from the Dangote Refinery, NNPC’s sole off-taker status remains firmly in place, with no clear indication of when the agreement will end. Until that changes, oil marketers will continue operating within the confines of the NNPC-Dangote arrangement.

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Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.

Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.

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