Dangote May Abandon Nigeria, Export Petrol Abroad as NNPC Sets Tough Conditions to Lifting Product
- The Dangote Refinery may ditch the Nigerian market and export its petrol as talks with NNPC seem to have stalled
- The NNPC has refused to be the sole distributor of the Dangote petrol, saying the Refinery can sell to any marketer
- Nigerians see the refusal of NNPC and the recent increase in petrol prices as moves to frustrate the Refinery
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Dangote Refinery may export its petrol following the refusal of the Nigerian National Petroleum Company Limited (NNPC) to lift the product.
The NNPC disclosed in a statement on Saturday, September 7, 2024, that it would only buy Dangote petrol if it sold cheaper than the international market price.
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NNPC refuses to lift Dangote petrol
The NNPC statement contradicts Aliko Dangote's claim that the Refinery was waiting for the national oil firm to roll out its product.
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NNPC's statement disclosed that the company would only be the sole distributor of Dangote petrol if PMS prices were higher than pump prices.
The NNPC also stated that the $19 billion facility and other refineries can sell directly to any marketer on a willing buyer, willing seller basis, saying that it has no interest in becoming the distributor for any entity in a free market.
Punch reports that at the petrol's unveiling, Dangote stated that the facility would roll out petrol whenever the NNPC was ready.
He disclosed that petrol from the Refinery would get to the filling stations within 48 hours after all arrangements with the NNPC were concluded, stating that queues would disappear.
He refused to disclose the price, saying that it is the prerogative of the NNPC to do so.
Dangote said:
“I can’t say anything about the pricing because we don’t control the pricing. At the moment, it is controlled by NNPC, not Dangote. We will wait for them. But, our own for now is to ensure the product is available and round-tripping is stopped.”
The billionaire said the NNPC would sell and distribute the product under the naira crude sale agreement.
Dangote negotiations with NNPC stalled?
However, the talks between Dangote Refinery and NNPC have broken down, which may lead to the mega Refinery exporting its petrol.
The national oil company has issued several statements denying it would fix prices for Dangote or become its sole distributor.
The recent petrol price increases by NNPC surprised Nigerians. They happened the same day Dangote Refinery unveiled its petrol despite several months of government subsidy payments.
Nigerians suspect sabotage
Many see the move by NNPC as an attempt to sabotage the Refinery, as many Nigerians had hoped that Dangote would crash the commodity’s price as it did with diesel and aviation fuel.
“I think the increase in the pump price of petrol by NNPC was strategic and was possibly meant to throw a wedge in the wheel of the Dangote Refinery.
“How can you explain that the NNPC, which has received trillions of naira in subsidy, will suddenly increase petrol prices? Something does not add up,” energy policy analyst Joe Ugwu told Legit.ng.
The Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, said Dangote petrol would be exported if the NNPC and other marketers refuse to patronise it.
He acknowledged that there were attempts to block the lifting of products from the Refinery and stated that the firm would resort to exporting PMS as much as possible.
He expressed surprise that the gigantic Refinery began to face unforeseen challenges when it was set to start operations.
Oil marketers seek an alternative to Dangote petrol
Legit.ng earlier reported that oil marketers might ditch the Dangote Refinery and start importing petrol, following the recent statement by the NNPC that it would only offtake the product from the refinery if the market prices of the newly launched commodity were higher than the pump prices in Nigeria.
The national oil firm also stated that Nigeria's world’s single-train refinery and other facilities are free to sell directly to any marketer on a willing buyer, willing seller basis.
The NNPC said it has no plans to become the distributor for any entity in a free market.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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