Reports indicate that while numerous oil marketers are actively seeking to purchase the product directly from the refinery, others are opting to import it, with hundreds of millions of litres of imported PMS expected to arrive in Nigeria within the next two weeks.
Between Friday, October 18, and Sunday, October 20, at least four vessels carrying imported PMS docked at various seaports along the nation's borders. A document from the Nigerian Port Authority revealed that approximately 123.4 million litres of PMS were offloaded at two seaports to enhance fuel availability across the country.
Previous reports have indicated that oil dealers plan to import PMS to complement the supply from the $20 billion Dangote refinery. As major oil marketers proceed with their imports, others have begun to source PMS directly from the refinery located in Lekki.
A senior official at the refinery confirmed that marketers are now permitted to engage in direct transactions with the company on a willing-buyer, willing-seller basis.
"Marketers are already coming to the refinery to lift PMS directly, rather than going through intermediaries," the official, who requested anonymity due to a lack of authorization to discuss the matter, stated.
The source could not disclose the pricing for the product but emphasized that oil dealers would not approach the refinery unless the price was advantageous.
"We have established agreements with some marketers, and discussions with others are ongoing. I cannot specify the exact price, but if it were unfavorable, the marketers would not be coming to us," the official added.
He asserted that conditions are improving, particularly following the Federal Government's initiation of crude supply to the facility.
Another official at the site revealed to one of our correspondents that several trucks from various marketers were loading the product directly from the plant, bypassing NNPC.
“Some of the trucks you observed today were from marketers acquiring the product directly from Dangote, without involving NNPC. Thus, direct sales have commenced,” the source indicated.
The official elaborated that, in light of the high demand for petrol both in Nigeria and abroad, the refinery has prioritized producing 53 percent of PMS from its crude oil supplies.
“This ratio may be adjusted in the future if the demand for other finished products surpasses that for petrol, but currently, approximately 53 percent of our crude is allocated for petrol production, with the remaining percentage dedicated to other products,” the official explained.
When inquired whether marketers had begun purchasing petrol directly from Dangote without NNPC's involvement, a prominent major marketer in the country confirmed this.
“Yes, everyone is in the process. It was anticipated that this would occur soon, and it is a standard business transaction,” the source stated.
This stands in contrast to assertions from some sources suggesting that the refinery would be unable to sell petrol to marketers unless its agreement with NNPC was terminated.
It is worth noting that the company had previously announced that NNPC would be the exclusive off-taker of its petrol starting September 15.
A source at the refinery mentioned that this decision was made by the Federal Government. The source expressed surprise when the Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency declared on October 11 that marketers could now lift petrol directly from the refinery.
Petroleum product marketers can now purchase Premium Motor Spirit (PMS) directly from local refineries, bypassing the Nigerian National Petroleum Corporation (NNPC), according to Wale Edun, the Minister of Finance and head of the committee overseeing this change.
He emphasized that marketers should engage in direct transactions with refineries based on mutually agreed commercial terms, which is expected to foster competition and enhance market efficiency.
Following this announcement, industry operators indicated that the market has been fully deregulated, allowing them to approach refineries for PMS lifting applications.
Recently, Hammed Fashola, the Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), led a delegation to meet with Devakumar Edwin, Vice President of Dangote Industries, in Lagos.
While Fashola did not provide extensive details about the meeting, he expressed gratitude for Edwin's support. "Edwin welcomed us warmly and assured us that he would facilitate smoother business operations for IPMAN with Dangote," he noted. Fashola further mentioned,
"We had a productive discussion with the team, and we are in the process of finalizing logistics and modalities. IPMAN is committed to collaborating with Dangote, and we anticipate starting product lifting from the facility soon."
However, IPMAN clarified that it cannot begin immediate off-take of the product until the refinery terminates its contract with the NNPC. In contrast, refinery officials stated that they are currently selling PMS to certain marketers.
When the Dangote refinery commenced PMS sales on September 15, the NNPC claimed to have acquired the product at N898 per litre, a statement the refinery labeled as misleading. The refinery indicated that the naira-for-crude committee would be responsible for announcing the PMS price, but as of October 22, no announcement had been made.