In a potential shift that could impact the local petrol market, the Dangote refinery has signaled it may start exporting its Premium Motor Spirit (PMS) due to the Nigerian National Petroleum Company Limited’s (NNPC) refusal to serve as its sole buyer. This development follows NNPC’s recent announcement that it would only purchase petrol from Dangote if its pricing is competitive with international market rates.
The NNPC’s spokesman, Olufemi Soneye, stated on Saturday that the company is not obligated to buy petrol from the Dangote refinery unless the market prices of PMS exceed local pump prices. This stance contrasts sharply with Aliko Dangote’s earlier claims that his refinery was merely awaiting NNPC’s readiness to roll out its product.
In response to criticism from the Muslim Rights Concern (MURIC), which accused the NNPC of undermining the refinery, Soneye clarified that the pricing of petroleum products is driven by global market forces, and noted that recent adjustments in domestic pump prices do not hinder the refinery’s access to the market. He reiterated that both Dangote and other refineries in Nigeria are free to engage in sales via a “willing buyer, willing seller” arrangement without the NNPC acting as a distributor.
During an unveiling of the refinery’s operations, Dangote expressed optimism that fuel would be available at filling stations shortly after final negotiations with the NNPC were completed. “We are ready, and I pray that within the next few days, you won’t see any petroleum queues as soon as we finalize with NNPC,” he stated, emphasizing that while Dangote was prepared to launch sales, pricing decisions rest with the NNPC.
However, as communications between the two entities appear to have soured, the refinery’s plans seem to pivot toward exporting its petrol if domestic purchases do not materialize. Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, indicated that the refinery has been forced to export its petroleum products due to a lack of local demand from traders and the NNPC. “If the traders or NNPC are not buying the product, obviously we will end up exporting the PMS as we are doing with aviation fuel and diesel,” he noted.
Nigerians are left wondering about the future of local fuel pricing after the NNPC recently increased the pump price of petrol on the same day the Dangote refinery announced its readiness to supply petrol. The potential for lower prices arising from domestic refining now hangs in the balance as the public watches to see how these negotiations unfold.
