Why NNPC may not lift Dangote petrol
Four days before the September 15, 2024, date announced by the Nigerian National Petroleum Company Limited (NNPC) to begin lifting Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Refinery, journalists learned that no commercial agreement has been finalized between the two parties.
Multiple sources from both NNPC and Dangote confirmed on Tuesday that the two companies have yet to reach a deal on the quantity and pricing of the petrol to be lifted by the national oil company.
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On September 5, 2024, Adedapo Segun, Executive Vice President of Downstream at NNPC, stated during a live television broadcast that the company would start lifting Dangote petrol on September 15.
He also outlined factors that would determine the price of the commodity, noting that foreign exchange rates and market forces would influence the cost of petrol, and emphasizing that the market had been deregulated.
However, on Tuesday, government sources close to the development revealed that no paperwork had been signed by either party for the lifting of petrol from the $20 billion Dangote refinery by NNPC starting September 15.
They stated that the terms and conditions required for the deal had not been agreed upon, stressing that the national oil company may not lift any petrol from Dangote on the announced date.
When asked whether plans had been finalized for NNPC to start lifting Dangote petrol on September 15, 2024—a date rapidly approaching—a senior official at the Dangote refinery, who spoke confidentially due to lack of authorization, said that no agreements had been reached on pricing or other critical aspects related to petrol lifting.
“Right now, there is no documentation from NNPC or the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) regarding product lifting. Nobody has informed us about plans to pick up PMS on September 15.
“For a product to be picked up in five days, there must be discussions on pricing and other details, which are part of the commercial engagement. There must be an offer, and the lawyers will need to structure the terms and conditions,” the source stated.
Regarding how PMS lifting from the Dangote refinery will be handled, the official explained, “It will follow the same process as other products: imported and stored in terminals before being lifted by marketers for distribution across the country.”
Another official at the Federal Ministry of Petroleum Resources corroborated the position of the Dangote source, stating, “Nothing concrete has been agreed upon at this time regarding petrol lifting, but I believe the process is still ongoing.”
Proofreading by Uchechi Ojo, Sub-editor at Neptune Prime.
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