Nigeria’s Dangote Refinery Deal with NNPC Puts Other Oil Marketers on Hold
A recent directive from the Nigerian Federal Government had opened the door for oil marketers to purchase Premium Motor Spirit, also known as petrol, directly from the Dangote Petroleum Refinery. However, despite this policy shift, the Nigerian National Petroleum Company Limited remains the sole off-taker of petrol from the Dangote refinery.
The Federal Government’s statement, released on October 11, 2024, through the finance ministry, announced that oil marketers could now negotiate purchases of petrol directly from local refineries, including the Dangote refinery, without going through the NNPC. This move aimed to promote competition and improve market efficiency.
However, a meeting between the Independent Petroleum Marketers Association of Nigeria and Dangote refinery officials revealed that an existing agreement between the NNPC and Dangote refinery prevents other oil marketers from purchasing petrol directly from the plant. Until the agreement is terminated by either party, the direct sales will be on hold.
The IPMAN association issued a notice to its members stating that marketers who are yet to register with the association will not benefit from the opportunity to purchase petrol directly from the Dangote refinery once the agreement with NNPC ends. The association also announced that its National Executive Council would hold a meeting in Abuja to discuss the matter further.
Meanwhile, major oil marketers have confirmed that they are still lifting products from the Dangote refinery through the deal between NNPC and the refinery. The oil marketers revealed that there is a subsisting deal between NNPC and the Dangote refinery, and it is based on that deal that they are lifting petrol from the refinery.
The details of the agreement between NNPC and the Dangote refinery are unclear, and officials from both organizations have not responded to inquiries about the matter. However, it is evident that the NNPC remains in a dominant position as the sole off-taker of petrol from the Dangote refinery, and other oil marketers are eagerly waiting for the agreement to be terminated so they can benefit from the new government policy.
As the situation unfolds, oil marketers and stakeholders are watching closely to see when the NNPC-Dangote agreement will end and what the future holds for the Nigerian oil market.
