The Dangote Refinery is set to begin distributing Premium Motor Spirit (PMS) starting Sunday, September 15, 2024. This announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, during a press conference in Abuja.
Represented by Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), Edun confirmed that all necessary agreements have been finalized to facilitate the refinery’s inaugural petrol distribution.
As part of the new initiative, the Nigerian National Petroleum Company Limited (NNPC) will supply 385,000 barrels per day (bpd) of crude oil to the Dangote Refinery from October 1, 2024. The transactions will be conducted in Naira – Nigeria’s local currency, with the refinery providing PMS and diesel of equivalent value to the domestic market. While diesel will be available for sale to interested buyers, PMS will initially be sold exclusively to NNPC, which will then be distributed to marketers across the country.
“Diesel will be sold in Naira by the Dangote Refinery to any interested off-taker. PMS will only be sold to NNPC, NNPC will then sell to various marketers for now,” Adedeji said.
A one-stop shop for regulatory and security services is being set up to streamline this process at the Nigeria Ports Authority (NPA) in Lagos. This hub will ensure smooth coordination between various stakeholders during the rollout period, which will be closely monitored for the next three to six months.
The initiative, approved by the Federal Executive Council (FEC) under President Bola Tinubu, aims to reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products in Nigeria. By facilitating crude sales and refined product purchases in Naira, the government hopes to stabilize fuel supply and enhance economic efficiency.
Key Points To Note
- NNPC will initially act as the sole distributor of PMS from Dangote Refinery.
- Petrol prices at the pump are not expected to change immediately.
- Dangote Refinery’s involvement will address Nigeria’s fuel supply challenges.
- Marketers will begin direct purchases from the refinery after finalizing pricing agreements.
This move is seen as a major step towards boosting Nigeria’s domestic fuel production and reducing reliance on fuel imports.
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