The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the Dangote Refinery will start distributing Premium Motor Spirit (PMS) on Sunday to only the NNPC for now.
Edun, represented by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, made this disclosure during a press briefing in Abuja on Friday.
He said, “I am glad to announce that all agreements have been completed and loading of the first batch of PMS from the Dangote Refinery will commence on Sunday, Sept. 15.”
“From Oct. 1, NNPC Ltd. will commence the supply of about 385kbpd of crude oil to the Dangote Refinery, to be paid for in Naira. In return, the Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market, to be paid in Naira.”
“Diesel will be sold in Naira by the Dangote Refinery to any interested off-taker. PMS will only be sold to NNPC, NNPC will then sell to various marketers for now,”
Edun stated that all related regulatory costs, including those from the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), would be paid in Naira.
He also mentioned plans to establish a one-stop shop to coordinate services from regulatory and security agencies, along with other stakeholders, to ensure the smooth implementation of the initiative. This coordination hub would be located at the NPA in Lagos.
Edun further explained that the technical committee, which developed the initiative, would transition into an implementation, execution, and monitoring committee, operating out of Lagos for the next three to six months.
FEC approval to sell crude oil in Naira
Edun noted that the Federal Executive Council (FEC), led by President Bola Tinubu, had approved the sale of crude oil to local refineries in Naira, with petroleum products also being purchased in Naira.
He explained that this initiative would ease pressure on the Naira, cut unnecessary transaction costs, and improve the availability of petroleum products in the country.
The minister added that the implementation committee, which he chairs, along with the technical committee, had worked closely with NNPCL and Dangote Refinery to finalize the modalities for executing the FEC’s approval.
Backstory
Just over a year after the commissioning of the 650,000 barrel Dangote refinery and petrochemical plant, the company announced it had finally begun refining of petrol and would begin Distribution earlier this month.
Despite initial back and forth with authorities in the oil industry, the federal executive Council (FEC) approved the sale of crude oil to Dangote refinery in Naira and also asked oil producers to prioritise supply to the refinery and other local refineries in the country.
The plans to sell petrol to only the NNPC after which it will sell to other marketers contradicts the earlier position of the NNPC where it stated that it is not the sole offtaker of petrol from the refinery and other marketers are free to do so.
