Dangote Refinery Strikes New Deal on Product Buy-Back as NNPC Prepares to Lift Petrol
- The Dangote Refinery and the Nigerian National Petroleum Company Limited are finalising a buy-back deal
- The vice president of Oil And Gas at Dangote Industries, Edwin Devakumar, disclosed that the deal will conclude soon
- He stated that the NNPC will supply the Dangote refinery crude oil in naira in exchange for refined petroleum products
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian National Petroleum Company Limited and the Dangote Refinery are concluding discussions on crude oil sales by the national oil company to the Dangote Refinery in the local currency and the buy-back of refined products from the plant in naira.
According to Devakuma Edwin, the vice president of oil and gas at the Dangote Refinery, the parties may conclude discussions on the deal soon.
Source: Getty Images
Marketers boycott Dangote fuel
Edwin also revealed that oil marketers had continued to boycott diesel and aviation fuel from the refinery, stating that they also reported the facility’s low-priced fuel to President Bola Tinubu.
The marketers reportedly told the president that the company’s cheap fuel was counterproductive to oil marketers’ businesses.
The Dangote official disclosed that NNPC demanded to oversee petrol production at the Dangote refinery based on the agreement that it would supply crude to the plant.
Legit.ng previously reported that the Nigerian government disclosed that crude oil sales to the $20 billion refinery and other local refineries would begin October 1, 2024.
According to reports, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, disclosed this during a meeting with the implementation committee.
During the Space event on X hosted by Nairametrics, Edwin disclosed that discussions were advanced on the naira transactions for crude oil purchase and product buy-back.
Dangote insists on crude oil sales in naira
The Dangote top executive said NNPC will monitor the production and then buy back in naira, stating the parties are waiting for the conclusion of the discussions.
He stressed that the Chairman of the Dangote Group, Aliko Dangote, insisted on dealing with the Nigerian government in naira due to foreign exchange challenges.
He said that over 95% of oil marketers and petroleum product importers in Nigeria do not buy products from the Dangote refinery.
He stated that the refinery manages to sell about 29 tankers of diesel daily due to low patronage from local importers.
Low patronage forces Dangote to export products
Edwin said the facility exports most of its diesel and aviation fuel due to poor local patronage.
He disclosed that the refinery has so far imported about 57 shiploads of crude oil due to limited supply from NNPC.
Edwin stressed that about 44% of the refinery’s petrol production capacity can meet Nigeria’s needs.
He said:
“You can come to the refinery and see; I can load 2,900 tankers daily. The whole country is empty, not one tanker. Whereas, where I can load 2,900 daily, not one tanker is being loaded. So they want to continue to import. So they are just blockading us.”
He said about 29 tankers lift fuel from other depots daily, neglecting local production.
NNPC offers fresh hope to end petrol scarcity
Legit.ng earlier reported that the Nigerian National Petroleum Company Limited (NNPC) has disclosed that its purchasing portal will reopen immediately after the backlog of petrol orders is cleared.
Oil marketers said that shutting down the portal encourages round-tripping of products while driving up prices.
Vanguard reports that the NNPC spokesman said the portal would be reopened after the NNPC clears the backlog.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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