Ahead of the September 15 date announced by the Nigerian National Petroleum Company Limited to commence lifting Premium Motor Spirit, popularly called petrol, from the Dangote Refinery, no commercial agreement has been reached to that effect by both parties.
Our contacts from NNPC and Dangote confirmed on Tuesday that the two oil firms were yet to reach a deal on the quantity and pricing of PMS to be lifted by the national oil company.
Last week, the Executive Vice President of Downstream, NNPC, Adedapo Segun, said during a live television programme that the company would lift Dangote petrol on September 15.
He also explained factors that would determine the price of the product, as he stated that foreign exchange rates and market forces would influence the cost of petrol, stressing that the market had been deregulated
In his reaction, Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprises (CPPE), raised concerns about the apparent disconnect between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Refinery regarding petrol supply in Nigeria. Speaking on Channels Television on September 9, 2024, Yusuf questioned why Dangote, despite having petrol available, is not seeing it distributed while Nigeria continues to rely on imports of refined products.
Yusuf highlighted that despite promises of domestic fuel sufficiency, the NNPCL’s lack of engagement with Dangote’s refinery seems counterproductive. He pointed out that “it is extremely difficult for the government to walk away completely from providing subsidy,” indicating that the social costs of reform have been significant. Yusuf stressed that there needs to be a strategic shift towards backward integration and import substitution to support the economy.
He criticised the government’s pricing adjustments and questioned their timing, suggesting that the price increase coincided with Dangote’s production announcement might have been misleading. Yusuf emphasised the need for a gradual reform process that takes social implications into account.
Addressing the issue of localising fuel transactions, Yusuf argued that Nigeria must seize the opportunity presented by Dangote’s refinery to reduce import dependency and enhance transparency. He expressed concern that the NNPCL’s apparent lack of enthusiasm for supporting domestic refining could undermine efforts to improve fuel availability and pricing.
Yusuf also highlighted the potential benefits of supporting domestic production, including energy security and job creation, and urged that the government and relevant institutions should prioritize and support local refineries transparently.
He concluded by expressing frustration that, despite Dangote’s readiness to supply petrol, the NNPCL’s inaction and continued importation of refined products do not align with the goal of achieving fuel self-sufficiency. Yusuf called for higher authorities to address these issues to stabilise the economy and reduce the burden on Nigerian consumers.
