Dangote Refinery Set to Launch Petrol Sales Soon

The Dangote Petroleum Refinery is poised to start selling Premium Motor Spirit (PMS), commonly known as petrol, marking a significant milestone in Nigeria’s energy sector. This development follows the refinery’s recent test-run of the product, and industry insiders confirm that the fuel will soon be available to the public.

An unnamed source within the industry revealed that both the Nigerian government and the Dangote Group are finalizing the details for the distribution of the refinery’s petrol. “The government and Dangote are working closely to ensure a smooth rollout of the product,” the source disclosed, indicating that the sale and distribution process is currently being sorted out with the Federal Government.

Notably, it appears that, for the time being, only the Nigerian National Petroleum Company Limited (NNPCL) will be authorized to sell petrol produced by the Dangote Refinery. This arrangement reflects ongoing negotiations between Dangote and the government to streamline the introduction of the product into the market.

The refinery, which has a capacity of 650,000 barrels per day, had initially planned to launch its petrol in June. However, the rollout was delayed due to challenges, including a shortage of crude oil and a dispute with the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), which had accused the refinery of producing substandard diesel. The situation improved after the Federal Government intervened, mandating that crude oil should be supplied to the refinery in the local currency.

One of the significant hurdles faced by Dangote and other local refineries has been the reluctance of international oil companies (IOCs) to sell crude oil directly to them. The IOCs have reportedly preferred to sell through foreign agents, leading to higher prices for local buyers. Dangote management has expressed frustration over this issue, stating that “local refiners should be allowed to purchase crude directly from Nigerian producers without having to go through international middlemen.”

The Federal Government recently announced that a new crude oil supply deal would commence in October, which is expected to ease some of these challenges. However, tensions have continued, with the Dangote Group accusing the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of failing to enforce the Domestic Crude Supply Obligations regulations effectively.

The NUPRC responded by stating that it had facilitated the supply of over 29 million barrels of crude oil to the Dangote Refinery from January to June 2024. However, Dangote Group’s spokesperson, Anthony Chiejina, disputed this claim. “We appreciate the allocation, but we have not received these cargoes,” Chiejina stated. He added that aside from a bilateral agreement with NNPCL, most of the crude processed by the refinery had been purchased from international traders rather than local suppliers.

As the Dangote Refinery prepares to enter the market, Nigerians are hopeful that the introduction of locally-produced petrol will lead to a reduction in pump prices, providing much-needed relief amidst rising fuel costs. The launch of petrol sales by the Dangote Refinery is seen as a pivotal moment that could transform Nigeria’s petroleum industry and improve the country’s self-sufficiency in fuel production.