The Dangote Refinery will begin distributing Premium Motor Spirit (PMS) to the Nigerian National Petroleum Corporation (NNPC) exclusively, starting Sunday, according to Finance Minister Wale Edun. Speaking through Dr. Zacch Adedeji, Chairman of the Federal Inland Revenue Service, Edun shared the update during a press briefing held in Abuja on Friday. The announcement comes after the completion of all necessary agreements, paving the way for the refinery to start loading its first batch of PMS.
Edun revealed that from October 1, the NNPC will supply approximately 385,000 barrels of crude oil per day (kbpd) to the Dangote Refinery. In exchange, the refinery will provide PMS and diesel in equivalent value to the domestic market. Both transactions will be conducted in Naira, part of the government’s plan to ease currency pressure and improve the local economy. While diesel will be available for sale to any interested off-takers, PMS will only be sold to the NNPC initially, which will then distribute it to other marketers.
To ensure smooth operations, all associated regulatory fees from agencies such as the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) will also be paid in Naira. Additionally, a one-stop coordination hub will be established at the NPA in Lagos. This hub will bring together regulatory and security agencies to streamline the implementation process, which will be closely monitored for the next three to six months by a committee.
This decision to sell crude oil to the Dangote Refinery in Naira, with petroleum products also being purchased in the local currency, was approved by the Federal Executive Council (FEC) under President Bola Tinubu. The initiative is expected to reduce unnecessary transaction costs and enhance the availability of petroleum products across Nigeria.
Despite initial uncertainty between the Dangote Refinery and authorities regarding market arrangements, the refinery is now set to play a pivotal role in Nigeria’s petroleum landscape. The exclusive agreement contradicts earlier statements made by the NNPC, which had previously indicated that other marketers, aside from NNPC, could purchase fuel directly from the refinery. However, this new development aligns with the government's efforts to stabilize the economy and streamline oil distribution within the country.
Over a year after the Dangote Refinery’s commissioning, this step marks the beginning of its contributions to the domestic fuel market, promising to boost Nigeria’s refining capacity and reduce dependence on fuel imports.
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