… to upscale to 30 Million Litres In October
… to upscale to 30 Million Litres In October
The Nigerian National Petroleum Company Limited NNPCL) is to provide Dangote Refinery with at least cargoes of crude oil daily, while the Refinery will in return make available 25 million litres of Petrol daily.
This is part of the deal the NNPCL is said to have entered into with the Dangote Refinery and Petrochemical, a source to close the two parties told Business Standards.
The volume of the refined product will however be increased to 30 million litres by October. Nigeria Consumes over 40 million litres of petrol per day. The shortfall from the supply from Dangote Refinery would be made up from imports.
The Dangote refinery started production of petrol based on the assurance from the Federal Government that the NNPC will increase the price of petrol to a reasonable level for the company to make profit.
This prompted the NNPCL, on Tuesday morning, to adjust its pump price of the product by N250 to N855 per litre.
The ex-depot price for marketers is said to be N765, but by the time dealers’ margin, transport, and union fees are added to this figure, the pump price of other marketers will be between N800 to N950 per litre depending on the location one finds himself or herself
The Dangote Refinery commenced production of petrol and this petrol is expected to hit the Nigerian filling stations as soon the company finalized the necessary arrangements with the Nigerian National Petroleum Company.
The pump price was, however, increased to N855 per litre almost immediately after Dangote Refinery commenced production.
Aliko Dangote, President of Dangote Group thanked President Bola Tinubu, Lagos state governor, and other stakeholders for making this reality.
Reacting to the increase in the pump price of petrol, the managing director of 11 plc, Tunji Oyebanji stated that the exercise would allow the NNPC to be comfortable facing suppliers, stating that in one week all the queues at the filling station would disappear.
He said the exercise will allow NNPC to import and that supplies should have improved in the next two weeks
‘Our Quality Matches That Of America
After over a year of its launch in May 2023, Dangote Refinery, on Tuesday, rolled out its first Premium Motor Spirit (PMS), also known as petrol, from its 650,000 barrels per day facility.
At a press conference, owner of the Lagos-based refinery and billionaire businessman Aliko Dangote declared that “it’s a celebration day” for Nigerians.
He assured all citizens that they “are now going to have good petrol while the engines of your vehicles will last longer. You will not be having an engine issue, which a lot of us were having. It won’t happen at all.”
“The quality here will match that of anywhere in the world; US, America, we will make sure that nobody will beat us in terms of quality,” Dangote said.
‘We’ll Save Forex’
The refinery owner said as soon as his company finalises modalities with the Nigerian National Petroleum Company Limited (NNPCL), the product will hit the market.
“As soon as we finalise with the NNPCL, our product will start going into the market.
“We will help to restore industry and manufacturing. We will begin real import substitution, which is what we have, you know, saving foreign exchange, earning foreign exchange, which will stabilise the naira, and it will also help bring down inflation and cost of living,” he stated.
Last December, Dangote, Africa’s leading industrialist, commenced operations at his $20bn facility in Lagos with 350,000 barrels a day.
The refinery initially bogged by regulatory battles, hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.
The refinery has begun the supply of diesel and aviation fuel to marketers in the country and now petrol.
NNPCL Debt Challenge
The rollout of petrol by the Dangote Refinery followed the admission by the NNPCL that it owes “significant debt to petrol suppliers” and this poses a threat to the sustainability of fuel supply.
There have been reports that a $6 billion debt the NNPCL owes petrol suppliers has worsened petrol scarcity in Nigeria, a perennial feature since the beginning of 2024.
At different times, the NNPCL blamed logistics challenges, and flooding, amongst others for the supply shortages of the essential commodity
NNPCL Can’t Continue Paying Petrol Price Differential Without Going Bankrupt – Onanuga
Presidential aide, Bayo Onanuga, says the Nigerian National Petroleum Company Limited (NNPCL) Limited admitted to having financial constraints because it can no longer subsidise petrol.
Onanugu, the Special Adviser on Information and Strategy to President Bola Tinubu, disclosed this in a post on X on Tuesday.
He said if the NNPCL continues to pay the difference between the landing cost and petrol price, the national oil company will go bankrupt.
Onanuga said NNPC’s debt was a result of the company’s efforts to absorb rising petrol costs and protect Nigerian consumers, rather than any government deception.
“NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent,” he said.
“The situation has greater implications for the ability of the three tiers of government to function as the NNPC has failed to pay into the Federation Account, the money that should go to the government.
“There are no easy choices. Something must be done to make NNPC survive, and keep the engines of government running and petrol flowing at the pumps.
“That is the scenario that is unfolding, and the game changer and big relief giver may well be the Dangote refinery and other local refineries, which will become the fuel suppliers to the local market.
“When Dangote Refinery and other refineries, including government-owned Port Harcourt Refinery, come fully on stream, our country and economy will benefit on all fronts. There will be many good paying jobs that will be created along the value chain.”
According to Onanuga, there will also be a drop in the huge demand for foreign exchange to import petroleum products.
Earlier, the NNPCL increased the price of petrol to N855 per litre, but the landing cost of the Premium Motor Spirit (PMS) was around N1,200.
