Dangote Refinery Begins Direct Petrol Sales to Marketers

The Dangote Petroleum Refinery has officially commenced direct sales of Premium Motor Spirit (PMS), commonly known as petrol, to oil marketers, bypassing the Nigerian National Petroleum Company Limited (NNPC). This development signals a significant shift in Nigeria’s petroleum distribution landscape.

Sources at the refinery confirmed that several marketers are now lifting petrol directly from the refinery on a willing-buyer, willing-seller basis. This direct engagement comes amid rising efforts by other marketers to import petrol, as hundreds of millions of litres of imported PMS are expected to arrive in Nigeria within the next two weeks.

Previously, it was reported that four vessels carrying about 123.4 million litres of PMS had docked at Nigerian ports between October 18 and October 20, aiming to boost the nation’s fuel supply. These imports are meant to supplement local supply from the Dangote refinery, valued at $20 billion.

A senior official from Dangote Refinery confirmed the direct sales, explaining that agreements had been reached with some marketers and negotiations were ongoing with others. “Marketers are already lifting PMS directly from the refinery, not through a third party. If the price wasn’t favorable, they wouldn’t be coming to us,” the official said. Although the exact price remains undisclosed, officials insist it is competitive.

The shift in distribution has also been attributed to increased petrol demand both domestically and internationally. The refinery is currently dedicating about 53% of its crude oil processing capacity to PMS production, with the possibility of adjusting this allocation based on future demand for other refined products.

This move marks a departure from earlier arrangements, where the NNPC was positioned as the sole off-taker of the refinery’s petrol. However, recent directives from the Federal Government’s Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency have encouraged oil marketers to engage directly with local refineries for their PMS supplies. This directive promotes competition and market efficiency by allowing marketers to negotiate their terms without NNPC’s involvement.

Industry stakeholders, including members of the Independent Petroleum Marketers Association of Nigeria (IPMAN), have expressed optimism about the new arrangement. Following a recent meeting between IPMAN officials and Dangote Industries’ Vice President, Devakumar Edwin, IPMAN leaders indicated their readiness to collaborate with the refinery. However, some within the association still believe that full collaboration will require the termination of Dangote’s contract with the NNPC.