Energy
NNPCL to supply 60% of Dangote Refinery crude oil from Oct 1
Yemie ADEOYE
AS part of the energy security of the federal government initiative the Nigerian National Petroleum Company Limited (NNPCL) will begin supplying 385,000 barrels per day (BPD), representing 60 percent of daily crude oil supply to the 650,000 bpd capacity Dangote Refinery starting October 1, 2024.
Payment for these supplies will be made in Naira, a move expected to significantly boost domestic energy production. In exchange, the Dangote Refinery will supply Premium Motor Spirit (PMS) and diesel of equal value to the domestic market, also to be paid for in Naira.
Group Chief Executive Officer of Nigerian National Petroleum Corporation (NNPC) Limited Mele Kyari
The sale of diesel will be open to any interested offtaker, while PMS will initially be sold exclusively to NNPC for distribution to local marketers.
The Minister also emphasized that all associated regulatory costs from agencies like the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) would be paid in Naira.
In preparation for smooth implementation, a one-stop service center will be established in Lagos to coordinate the activities of regulatory and security agencies involved in the project just as the Federal Government has initiated the sale of crude oil to local refineries and the purchase of petroleum products entirely in Naira.
This landmark policy is aimed at reducing pressure on the national currency, cutting transaction costs, and ensuring a steady supply of petroleum products across the country.
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The Honourable Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced the commencement of the initiative at a press briefing in Abuja, following a meeting of the Technical Sub-Committee on the sale of crude to local refineries.
Represented by Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), the Minister revealed that all agreements and frameworks for the project’s rollout had been finalized.
“Under the leadership of Mr. President, the Federal Executive Council (FEC) approved this bold initiative, which allows crude oil to be sold to refineries in Naira, while petroleum products will also be purchased in Naira,” the Minister stated.
“This will alleviate pressure on the Naira, reduce unnecessary transaction costs, and improve the availability of fuel products across the nation.”
“This initiative marks a significant milestone in our journey toward energy self-sufficiency. We are grateful for the hard work and patriotism exhibited by all involved over the past few weeks. Mr. President has championed this vision, and we are fully committed to its successful implementation,” Mr. Edun concluded.
This groundbreaking move is expected to enhance Nigeria’s energy independence, fortify its economy, and serve as a blueprint for future initiatives aimed at promoting local industries and reducing foreign exchange burdens.
Joe Ajaero, the President of the Nigeria Labour Congress (NLC), has criticized the Nigerian government for its role in the current pricing dispute between the Nigeria National Petroleum Corporation Limited (NNPCL) and the Dangote Refinery, attributing it to erratic government policies.
In a press briefing at Murtala Muhammed Airport Terminal Two on Wednesday, Ajaero condemned the situation as fraudulent and argued that a deregulated market should encourage competition and consumer choice, not impose restrictive pricing.
He asserted that the attempt to regulate Dangote’s pricing or influence private sector costs undermines fair market practices.
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Ajaero called on Nigerians to voice their concerns, claiming the government’s actions are undermining the private sector’s ability to set prices.
He said, “For a product produced here, he didn’t import with dollars, there was no landing cost, and they want him to sell it at the same cost as what they are bringing from abroad. That is fraudulent and unacceptable.”
Additionally, Ajaero criticized the government for not repairing the refineries as promised in August of the previous year, noting that no progress has been made as of September 2024.
On the subject of the N70,000 minimum wage, Ajaero assured that implementation is on track according to the agreement made on April 18, 2024.
He confirmed that the National Assembly has approved the bill, and the committee on consequential adjustments is actively working on its rollout.
The Coalition of Energy Reforms Lawyers and Activists (CERLA) has raised serious allegations against the Nigerian National Petroleum Company Limited (NNPC Ltd), accusing the state-run oil firm of attempting to sabotage the operations of Dangote Refinery.
In a recent press briefing, CERLA claimed that the NNPC Ltd falsely reported that Dangote Refinery was selling Premium Motor Spirit (PMS) at ₦868 per litre.
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The coalition’s spokesperson, Okwa Dan, condemned these actions, labeling them as a deliberate move to obstruct the progress of Dangote Refinery while fostering corruption within Nigeria’s energy sector.
“The NNPCL has consistently acted as a barrier to transparency in the sale and distribution of crude oil in Nigeria,” Dan remarked.
He further criticized the company for favoring the importation of low-quality fuel, which he described as both “fraudulent and counterproductive.”
Dan also accused the NNPCL, under the leadership of Mele Kyari, of sustaining a fuel subsidy scam that has kept the country dependent on imported PMS.
According to CERLA, the latest actions against Dangote Refinery are part of a broader scheme to stifle locally operated refineries.
“The NNPCL’s operations remain opaque, and we question why it has been designated the sole off-taker of PMS from Dangote Refinery,” Dan said, further arguing that the NNPCL’s claims of high PMS prices are misleading, as Dangote’s crude stock is priced in dollars.
CERLA has called on the NNPCL to cease what it terms a “slander campaign” against Dangote Refinery and has threatened legal action if the issue persists.
The coalition emphasized that the Nigerian public has suffered enough from the NNPCL’s lack of transparency and demanded accountability from the corporation.
Dan concluded by suggesting that the NNPCL’s discomfort stems from the emergence of the Dangote Refinery and urged the government to intervene in the matter.
By Yemie Adeoye
Nigeria’s national oil company, The NNPC Limited has announced new prices of Premium Motor Spirit (PMS), also known as Petrol accross its retail stations in Nigeria with Lagos retaining the lowest price of N950.22k a liter and Borno state retaining the highest price of N1,019.22k a liter.
Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Limited Mele Kyari
In a chart made available to Biztellers.com.ng and signed by Olufemi Soneye, spokesman of the national oil company, it was gathered that the North Central especially the FTC will be paying the sum of N992.22k for a liter of petrol, while the Northwest region will be paying N999.22. In the South South and the South East regions beginning with Rivers and Imo states, the price of PMS will be N980.22k.
The NNPC in its released estimated prices of Petrol (obtained from the Dangote Refinery)stated further that the NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by Government, but negotiated directly between parties on an arms length.
“The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1st, 2024.
The NNPC Ltd assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100% to the general public.
Attached to this statement are the estimated pump prices of PMS (obtained from the Dangote Refinery) across NNPC Retail Stations in the country, based on September 2024 pricing”. the statement further enthused.
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