NNPC to Be Exclusive Buyer as Dangote Refinery Commences Petrol Production

In a significant development, the Dangote Refinery in Lagos has commenced processing premium motor spirit (PMS), also known as petrol. According to a Reuters report, the Nigerian National Petroleum Company (NNPC) Limited will be the initial exclusive buyer of the refinery’s products.

The refinery, with a capacity of 650,000 barrels per day, has begun testing and is set to roll out petrol in the coming weeks. Devakumar Edwin, Vice President at Dangote Industries Limited, confirmed that NNPC will purchase the products exclusively to meet local demands.

While Edwin did not specify when the product will hit the market, he noted that if no one buys it, they will export it, just like they have been doing with aviation jet fuel and diesel.

This development comes as NNPC faces supply challenges, including a significant debt to international oil traders, which has contributed to the ongoing fuel scarcity in the country. However, the exclusive deal with Dangote Refinery could provide relief to NNPC and help address the fuel scarcity.

The arrangement is expected to reduce importation and logistics costs, allowing local marketers to purchase petrol from NNPC at a lower price. Additionally, the Federal Executive Council has approved the sale of crude oil to the Dangote refinery in local currency, on the condition that the refinery sells processed petrol to the country in the same currency.

This move is anticipated to contribute to a lasting solution to Nigeria’s fuel scarcity, with the Dangote refinery poised to play a crucial role in stabilizing the country’s fuel supply.

source: Nairametrics