The pricing of crude oil has introduced complexities for the Nigerian National Petroleum Corporation (NNPC) in its pursuit of the Dangote Petroleum project.

The Nigerian National Petroleum Company (NNPC) Limited is currently facing significant challenges in securing a dependable crude oil supply agreement and establishing a suitable selling price as it takes on the role of the exclusive off-taker of petrol from Dangote Petroleum Refinery.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced on Tuesday that the $20 billion Dangote refinery in Lagos is set to provide the Nigerian market with 25 million litres of petrol daily this September, increasing to 30 million litres in October.

Reports indicate that the NNPC has not yet finalized a robust arrangement to ensure sufficient crude feedstock supplies, which are essential for the immediate refining of 25-30 million litres of petrol each day this September.

A senior executive in the downstream sector noted, for NNPC, the crude supply issue remains a significant concern, and discussions regarding the pricing of crude in naira are still a considerable obstacle.

Sources indicate that petrol from the Dangote refinery could be available at filling stations within 48 hours, contingent upon the NNPC formalizing the arrangements regarding crude feedstock and pricing.

Aliko Dangote, president of Dangote Group, stated on Tuesday, "Our PMS (Premium Motor Spirit) can be at filling stations within the next 48 hours, depending on NNPC."

It is worth noting that Dangote and other local modular refineries have consistently accused the NNPC of failing to sell crude to them.

Anthony Chiejina, a representative of the Dangote Group, stated in August that the refinery needed 15 cargoes of crude oil for its operations in September but was unable to obtain the required amount from either the NNPC or the international oil companies (IOCs) operating in Nigeria.

"For September, we need 15 cargoes, with NNPC allocating six. Despite our efforts to engage the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), we have not been able to secure the remaining cargoes," Chiejina mentioned in a statement.

On July 11, the NUPRC seemed to indicate a thaw in relations between Dangote and the IOCs when it announced that major oil producers had agreed to create a framework aimed at ensuring a sustainable supply of crude oil to local refineries, emphasizing that the product would be provided at market rates.

Tensions escalated in June when Dangote representatives claimed that the refinery was being charged a premium exceeding $6 per barrel by IOCs for crude oil, highlighting that supplier hesitance had negatively impacted the refinery's ability to procure feedstock.

Furthermore, the NNPC, which was anticipated to be one of the primary suppliers for the facility, has not met its expected crude delivery commitments, creating uncertainty regarding supply channels for the newly launched plant.

Initially, the NNPC was expected to provide Dangote with 300,000 barrels per day (bpd) of discounted crude but has only delivered approximately 82,000 bpd since the refinery's inauguration, according to data from S&P Global Commodities at Sea in August.

The Dangote Petroleum Refinery has indicated that it will export its Premium Motor Spirit, commonly known as petrol, if the NNPC and other petroleum distributors in the country do not engage with it.

Devakumar Edwin, vice president of oil and gas at Dangote Industries Limited, stated on Monday that the company would resort to exporting its petrol if the NNPC and other local petroleum dealers chose not to support it.

The positive development for the nation is that we commenced the production of PMS at our refinery starting Sunday, he confirmed.

When inquired about the local sale of petrol, Edwin stated, "I previously mentioned the challenges we face due to a sort of blockade preventing the distribution of our products domestically.

Traders have been attempting to hinder this process, which has led us to focus on exporting our petroleum products. We are fully prepared to supply as much PMS as needed within the country.

However, if traders or NNPC do not purchase the product, we will inevitably continue to export the PMS, similar to our current practices with aviation fuel and diesel."