Sources Explain Why Dangote May Not Release Petrol by September 15
- Concerned parties have not come to a contractual arrangement to begin lifting from the Dangote Refinery according to sources
- Several NNPC and Dangote insiders confirmed that the two oil corporations were still at odds about the amount and price
- The NNPC's Executive Vice President of Downstream declared that Dangote gasoline would be discontinued on September 15
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Investigation has found that with four days left to Sunday, September 15, 2024, which was announced by the Nigerian National Petroleum Company Limited, no commercial agreement has been reached by parties involved to start lifting Premium Motor Spirit from the Dangote Refinery.
Source: Getty Images
Some NNPC and Dangote sources verified to The Punch that the two companies were still unable to agree on the quantity and cost of PMS that the national oil corporation would lift.
Recall that the NNPC's Executive Vice President of Downstream, Adedapo Segun, announced that the firm would lift Dangote petrol on September 15.
In addition, he listed the variables that would affect the commodity's price, emphasizing that the deregulated market would affect the price of gasoline due to market forces and foreign exchange rates.
However, on Tuesday, government sources with knowledge of the situation said that no documentation had been signed by either party authorizing NNPC to begin lifting gasoline from the $20 billion Dangote refinery on September 15.
They emphasized that the national oil corporation may not lift any gasoline from Dangote on the scheduled date and said that the terms and circumstances necessary for the contract had not been agreed upon.
What sources said
A senior officer at the Dangote refinery stated that no agreements had been made regarding price or the lifting of gasoline, among other things.
“Right now, no documentation from NNPC and NMDPRA (Nigerian Midstream and Downstream Petroleum Regulatory Authority) on product lifting. Nobody has spoken to us that they want to pick up PMS on September 15.
“For you to come and pick products in five days there must be discussions on pricing and other things, which is the commercial engagement. Of course, there must be an offer and other things, the lawyers will structure the terms and conditions,” the source stated.
The official said that PMS will be lifted from the Dangote refinery in a manner similar to how goods are imported, placed at terminals, and then lifted by marketers for national distribution.
The position of the Dangote source was supported by another representative of the Federal Minister of Petroleum Resources, who said that while no specifics about lifting gasoline have been decided upon as of yet, the process is still in progress.
Mr. Dan Kunle, a seasoned business advisor to multiple corporations in Nigeria's upstream, midstream, and downstream oil and gas sectors, pleaded with President Bola Tinubu to get involved in the situation.
“The President must act now to address the concerns caused by the issues surrounding the supply of petrol and how this has been fueling the socioeconomic crisis across the country,” he advised.
Speaking on the potentials of the billion dollar refinery, Samuel Oyekanmi, a research and insight associate with Norrenberger Financial Group said,
"The full implementation of Dangote Refinery is a potential growth propeller, however it will take time before we start seeing the full impact on the economy."
Sources hint at new petrol price
Legit.ng reported that Nigeria was thinking of letting billionaire Aliko Dangote's refinery determine the price at which it sells petrol, a move that might reshape the government's authority over how much fuel consumers must pay.
Bloomberg reported that this is according to people with knowledge of the situation.
The biggest oil producer in Africa has up until now imported all of its gasoline and paid a high yearly price for it. However, Dangote's enormous factory close to the commercial center of Lagos is beginning to refine gasoline locally, which is a significant shift.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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