The much-anticipated release of petrol from the Dangote Petroleum Refinery has been delayed once again, leaving marketers across Nigeria waiting anxiously for the refinery to begin distribution.
Initially, the refinery was expected to start rolling out petrol on August 12, 2024, but new reports suggest that the production may not commence as scheduled.
Multiple sources close to the situation confirmed that while the refinery is nearly ready to begin operations, it faces significant challenges due to a shortage of crude oil. One top official stated, “All is set. The refinery will roll out petrol this month. However, the concern is that the refinery cannot stop for one minute; it needs a constant supply of crude to keep going.”
Despite these assurances, ongoing issues with crude supply have cast doubt on whether the refinery can start production as planned. The facility, which has a capacity of 650,000 barrels per day, is still awaiting the delivery of 29 million barrels of crude oil from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“We will start the sale of PMS this August, though the low supply of crude oil has always been affecting the process. But from the information at my disposal, we are 100 percent ready for the supply of PMS,” said a source with knowledge of the refinery’s operations.
The refinery has been embroiled in a dispute with the NUPRC over the alleged supply of crude oil. The Dangote Group accused the NUPRC of failing to enforce Domestic Crude Supply Obligations, leading to a shortage of the required crude for the refinery. In response, the NUPRC claimed it had facilitated the supply of over 29 million barrels of crude oil to the refinery from January to June 2024.
However, Dangote Group’s spokesperson, Anthony Chiejina, disputed this claim, stating, “We wish to let them know that we are yet to receive these cargoes. Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer.”
Chiejina further emphasized the need for Nigerian refineries to buy crude directly from local producers rather than relying on international middlemen, a move that he believes would better support the country’s refining capacity.
As the refinery awaits the necessary crude oil, petroleum marketers are left in a state of uncertainty. Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria, said, “We are still waiting for them. Currently, it is only the NNPC that imports PMS because of the price differential.”
The delay has also sparked concerns that even if petrol is produced this month, it may not be sold locally due to pricing issues. Experts familiar with the situation have warned that the current price offered by the Nigerian National Petroleum Company Limited for petrol is not competitive for any trader. “For Dangote to sell to Nigerians, it has to be at a competitive rate. Dangote will source crude at the international rate, how do you expect him to sell at a rate below the cost price?” said one industry insider.
This latest delay follows a series of setbacks for the Dangote refinery. The facility, which began producing diesel and aviation fuel in April, has repeatedly postponed the release of petrol due to various challenges, including a fire incident in June.
Marketers and industry experts are calling on the NNPC and international oil companies to expedite the supply of crude oil to local refineries, both in naira and in adequate volumes. “We need to act fast to ensure that the refineries start refining as quickly as possible and bring down the costs of these petroleum products, which have remained a burden on Nigerians,” urged Chief Ukadike Chinedu, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria.
As the refinery works to resolve these challenges, Nigerians are left wondering when they will finally see the long-promised relief from fuel importation and the impact it will have on the nation’s economy