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A significant development in Nigeria's energy landscape occurred on Sunday as petrol refined at the Dangote Refinery began to be distributed to filling stations nationwide.
This event marks the first instance in nearly thirty years where a substantial portion of Nigeria's fuel requirements will be satisfied through domestic production.
Despite investing billions in the maintenance of its four official refineries over the past two decades, the country has struggled to achieve operational efficiency.
The $20 billion refinery, established by Nigerian billionaire Aliko Dangote in Lagos, commenced petrol processing last week. However, distribution was initially hindered by disputes regarding offtake rights and pricing.
Recent negotiations between the NNPC and Dangote Refinery, which lasted over a week, have now facilitated a new arrangement allowing Nigerians to purchase petrol at retail prices ranging from N855 to N897 per litre, reflecting an average under-recovery of approximately N130 for the NNPC.
A source from the downstream sector indicated that "NNPC Trading Limited will continue to import a shortfall of 15 million litres to satisfy Nigeria's daily petrol demand, estimated at 40-50 million litres."
Additionally, it was noted that each marketer would be permitted to take a maximum of 50 trucks daily, purchasing at a price of N765.99 through NNPC Trading Limited, which includes their transportation costs, and selling at the current pump price of N855 to N897, depending on location.
Oil marketers have confirmed that the NNPC has begun dispatching trucks to the refinery for product loading, and the national oil company will also utilize its vessels for PMS loading.
Olufemi Adewole, the executive secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), stated, "We have been transporting diesel (AGO) and aviation fuel (jet fuel) and are eager to begin transporting petrol (PMS)."
Regarding pricing, he mentioned, "We are awaiting clarification on the pricing structure, and once that is established, we will take the necessary steps to fulfill the energy requirements of Nigerians."
Olufemi Soneye, the Chief Corporate Communications Officer at NNPC, has confirmed the company's readiness to commence petrol lifting today.
He stated, "NNPC Ltd has initiated the deployment of our trucks and vessels to the Dangote Refinery to facilitate the lifting of PMS in alignment with the refinery's scheduled date of September 15th.
Our trucks and personnel are already on-site and prepared to start the lifting process. We anticipate an increase in the number of trucks, with deployments continuing throughout the weekend to ensure we can begin loading as soon as the refinery becomes operational on September 15, 2024."
Soneye noted that at least 100 trucks have already arrived at the refinery for petrol lifting, with the potential for that number to rise to 300 by Saturday evening.
Zacch Adedeji, head of Nigeria’s tax authority, expressed his satisfaction, stating, "I am pleased to announce that all agreements have been finalized, and the first batch of Premium Motor Spirit will commence loading on Sunday."
Adedeji further explained that in return for crude oil, Dangote will provide gasoline and diesel of equivalent value to the domestic market, with transactions conducted in the local naira currency.
The Nigerian government has previously indicated its support for the sale of crude to Dangote in naira. The production from Dangote is anticipated to significantly influence billions of dollars in trade within fuel markets both regionally and globally, as Nigeria continues to be a major consumer of fuel, importing nearly 250,000 barrels daily last year, primarily from Europe, according to data from analytics firm Vortexa Ltd.