Dangote Petrol Ready For Rollout

The Dangote Petroleum Refinery is preparing to begin selling Premium Motor Spirit (commonly referred to as petrol).

This announcement follows a recent test run of the product at the refinery, which has a capacity of 650,000 barrels per day.

Sources from the industry, who spoke on the condition of anonymity, informed our correspondent that the product will soon be available in the market. They also indicated that the government and the Dangote Group are coordinating the details for the distribution of the product.

A government official indicated that the Federal Government is currently addressing the sale and distribution of PMS.

The official further mentioned that, at this time, only the Nigerian National Petroleum Company Limited is permitted to sell fuel from the Dangote refinery.

It’s important to note that the Dangote refinery was expected to start producing petrol in June; however, it faced crude oil shortages and became embroiled in a conflict with the Nigerian Midstream and Downstream Regulatory Authority, which claimed the refinery was producing substandard diesel.

The Federal Government’s decision to supply crude oil to the refinery in the local currency appears to be producing the intended effects.

It has been reported, Dangote and other local refineries have continually asserted that international oil companies are not supplying crude oil to domestic refiners.

Recently, the Federal Government confirmed the crude oil supply agreement is set to begin in October.

Dangote Group’s management claims the International Oil Companies (IOCs) demands to sell crude oil to their refinery via foreign agents. They argued that this practice would lead to a continuous rise in the local price of crude, as the trading arms were offering cargoes at prices $2 to $4 per barrel higher than the official rate set by the NUPRC.

The group has also claimed that foreign oil producers appear to be favoring Asian nations in their crude oil sales from Nigeria.

Last month there was a dispute between the Dangote refinery and the Nigerian Upstream Petroleum Regulatory Commission regarding the alleged delivery of 29 million barrels of crude oil to the refinery.

The Dangote Group accused the NUPRC of not adequately enforcing the Domestic Crude Supply Obligations regulations, stating that the refinery has not received sufficient crude oil supplies locally.

In response, the NUPRC refuted the allegation, asserting that it enabled the delivery of more than 29 million barrels of crude oil to Dangote from January to June 2024.

The NUPRC emphasized that it had supported the domestic supply of crude oil to the Dangote refinery and other refineries through the monthly production curtailment platform.

However, the Dangote Group quickly countered this claim, stating that it had not received 29 million barrels of crude oil from any source.

Anthony Chiejina, spokesperson for the Dangote Group, stated, “We acknowledge the NUPRC’s announcement regarding the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals. We appreciate this allocation; however, we want to clarify that we have not yet received these cargoes.

“In addition to the long-term supply agreement we negotiated with NNPCL, NUPRC has only facilitated the acquisition of one crude cargo from a local producer. The remaining cargoes we have processed were sourced from international traders.”

Chiejina stated that the refinery is simply requesting that Nigerian refineries purchase crude oil directly from local producers instead of relying on international intermediaries.

There is optimism among Nigerians that Dangote will significantly reduce the price of PMS at the pump.