The Federal Government of Nigeria and Dangote Refinery have reached a critical agreement that will see the supply of petrol from the refinery begin on Sunday, September 15, after resolving issues related to pricing and supply. This deal comes at a time of nationwide petrol scarcity, which has left many Nigerians struggling.
Zacch Adedeji, Chairman of the Federal Inland Revenue Service and a key member of the Presidential Committee on the Sale of Crude Oil and Refined Products, confirmed the development on Friday. Adedeji stated that the Nigerian National Petroleum Company Limited (NNPCL) will remain the sole off-taker of Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Refinery, while other marketers will source the product exclusively from the NNPC.
He further revealed that beginning October 1, 2024, the NNPC will supply Dangote Refinery with 385,000 barrels of crude oil daily, with all payments to be made in Naira. In exchange, Dangote Refinery will provide petrol and diesel of equivalent value to the domestic market, also to be paid for in local currency.
While this agreement is seen as a way to ease the ongoing fuel shortage, it is also likely to raise eyebrows due to the exclusivity granted to the NNPC and the insistence on Naira payments, which could complicate matters in a struggling economy.
In a notable shift, Dangote Refinery will sell diesel in Naira to any interested buyer, but petrol sales will remain strictly with the NNPC, which will then distribute to other marketers. The decision to continue with a subsidy policy on petrol, despite its economic implications, is likely to spark further debate.
“All associated regulatory costs will also be paid in Naira,” Adedeji emphasized, underscoring the government’s push to maintain local currency transactions even in a deal of this magnitude.
The deal, while promising to alleviate fuel scarcity, leaves open questions about its long-term impact on the market and the fairness of exclusive NNPC access to the country’s largest refinery output.
