NNPC Begins Purchasing Dangote Refinery Petrol; See Price Set at per Litre
Starting Tuesday, the Nigerian National Petroleum Company (NNPC) Limited has begun acquiring premium motor spirit (PMS) from Dangote’s massive refinery in Lekki, Lagos, signaling a new phase in Africa’s oil industry.
The $20 billion refinery, which has commenced operations, offers a potentially more efficient solution to Nigeria’s petrol supply issues. According to Aliko Dangote, president of Dangote Group, the refinery is capable of meeting not only Nigeria’s petrol demand but also that of the entire sub-Saharan region.
“The capacity of our refinery will cover the petrol needs of Nigeria and sub-Saharan Africa,” Dangote stated during a press briefing at the 650,000 barrels per day facility. He added that the refinery will help address issues related to fuel smuggling and ensure better tracking of fuel distribution.
Experts anticipate that the new refinery will alleviate the severe petrol shortages currently affecting Nigerian cities. Dangote mentioned that petrol from the refinery could reach filling stations within 48 hours, contingent on NNPC’s logistics.
Dangote assured that the petrol produced will be of high quality, aiming to reduce the engine problems associated with inferior fuel. “Our petrol will match global standards, ensuring longevity for vehicle engines,” he promised.
**Refinery Production and Supply**
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced that the Dangote refinery will begin supplying 25 million liters of petrol daily starting in September, with plans to increase this to 30 million liters per day from October.
The NMDPRA has coordinated with NNPC Limited to ensure a smooth local crude oil supply to the refinery, which will now use local currency for transactions.
**Impact on Local Industry**
Billionaire businessman Femi Otedola, chairman of Geregu Power, suggested that the successful operation of Dangote’s refinery could diminish the role of local depots that previously relied on fuel imports. He advised depot owners to consider selling their assets while the market remains favorable.
Otedola reflected on past collaborations with Dangote, highlighting the shift from dependency on foreign fuel sources. “The days of relying on foreign powers for our fuel needs are over. This new refinery marks the end of the era for those who profited from our economic vulnerability,” he remarked.
**Effects on Fuel Pricing**
Ayodele Oni, a senior partner at Bloomfield Law, expressed cautious optimism about the refinery’s impact on petrol prices. He noted that while the reduction in logistics costs should lead to lower prices, international crude oil market fluctuations will still influence fuel pricing.
The refinery’s operations are expected to significantly affect fuel trade both regionally and globally. Historically, Nigeria has imported a substantial amount of refined fuel, but Dangote’s refinery aims to alter this dynamic.
**Price Increase at the Pump**
Meanwhile, petrol prices have risen to N897 per liter at various NNPC stations in Lagos, reflecting ongoing supply challenges. Recent months have seen widespread fuel shortages across Nigeria, with prices reaching up to N1,200 per liter through black markets.
In Lagos and other major cities, including Abuja, the increase in pump prices has intensified the struggle for fuel, impacting businesses and households alike.
