Dangote Refinery Fuel Sales: NNPCL Holds Exclusive Rights

NNPCL Sole Buyer of Dangote Refinery Fuel

“Until and when the agreement is terminated by either party, the direct...”

NNPCL increases petrol price to N1,030/liter in Abuja, citing Dangote Refinery supply. Get the latest updates on Nigeria's fuel prices and market trends.

The Nigerian National Petroleum Company Limited (NNPCL) retains exclusive rights to purchase petroleum products from Dangote Refinery, according to Dele Tajudeen, South-West Zonal Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN).

On October 16, Tajudeen disclosed this in a statement following IPMAN's meeting with the Dangote Group. The meeting, held on October 14, saw IPMAN's National Vice President, Hammeed Fashola, lead a delegation in discussions with Aliko Dangote, President of the Dangote Group, exploring possibilities for direct petrol purchases by marketers.

The Nigerian government's decision to allow marketers to buy petrol directly from Dangote Refinery sparked a significant development in the oil industry. This move was initially thought to end NNPCL's exclusive rights as the sole off-taker of Dangote Refinery's petrol. However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) clarified that the existing agreement between NNPCL and Dangote Refinery remains intact, despite productive discussions on direct petrol sales.

In fact, IPMAN's National Operations Controller, Mustapha Zarma, stated that they might contact Dangote's sales department to inquire about the price of petrol. If the price is competitive, IPMAN won't hesitate to purchase directly from Dangote to supplement NNPC's supply. This development indicates that the Federal Government and NNPC's declaration that Dangote Refinery would sell its product at market price implies no government intervention in pricing through subsidies.

The situation has led oil marketers to consider importing petrol if it's cheaper than buying from Dangote or NNPC. IPMAN's National Publicity Secretary, Ukadike Chinedu, noted that with the removal of subsidies, the price of petrol would be determined by demand and supply economics. This shift towards a competitive market is expected to bring about equilibrium in pricing and ensure a sustainable supply of petroleum products.

Takeaways:

Existing Agreement Remains: The agreement between NNPCL and Dangote Refinery remains in place despite discussions on direct petrol sales.

Competitive Pricing: IPMAN considers purchasing from Dangote if prices are competitive.

Importation Option: Oil marketers may import petrol if it's cheaper than buying from Dangote or NNPC.

Market-Driven Pricing: The price of petrol will be determined by demand and supply economics.

“The Vice President of Dangote confirmed that the Minister of Finance/ Coordinating Minister of the Economy, and the Minister of Petroleum Resources have directed them to commence sales of products to marketers who have duly registered with the refinery, but they are still having a pending agreement with NNPCL which still subsists.

“Until and when the agreement is terminated by either party, the direct sales will still be on hold,” he said.

The recent hike in petrol prices by NNPCL to N1,030 per liter in Abuja has sparked significant attention. This development comes on the heels of NNPCL's earlier adjustment of its petrol pump price on September 16, following the acquisition of supplies from Dangote Refinery.