Dangote Refinery has begun manufacturing premium motor spirit or petrol, with Nigerian National Petroleum Company Limited as its first exclusive buyer. According to a recent Reuters article, the refinery, with a capacity of 650,000 barrels per day, is in the last phases of testing and will begin producing gasoline in the coming weeks.
Devakumar Edwin, vice president of Dangote Industries Limited, also stated that the national oil firm is willing to purchase its products just to meet local demand. “We are testing the product (gasoline), and subsequently it will start flowing into the product tanks.
“If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel,” Edwin said. The report confirmed that the refinery is ready to roll out gasoline in the coming weeks as testing has begun in the 650,000 barrel per day petrochemical plant.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd. Remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” NNPC said.
He did not, however, specify when the product will be available. It was previously reported that the NNPC admitted to owing international oil traders around $6 billion in subsidy commitments, a debt that has severely hampered fuel delivery to local marketers. The scarcity is caused by these traders suspending petrol imports to the NNPC due to unmet obligations.
While NNPC first denied the allegations, the company ultimately admitted that its outstanding debts had a significant impact on the country’s ongoing gasoline crisis. Recall that NNPC Limited recently recognized its debt to international oil traders, which has contributed significantly to the fuel supply constraint that is affecting local merchants.
It was earlier reported that NNPC owes these traders around $6 billion in subsidy obligations, prompting them to stop supplying imported petrol to the company. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.
The recent announcement that NNPC will become the exclusive buyer of petrol from the Dangote Refinery could be a game-changer for the national oil company, which is struggling with substantial international debts.
By sourcing petrol exclusively from the Dangote Refinery, NNPC could significantly reduce importation and logistics costs, enabling local marketers to purchase fuel at lower prices.
This arrangement is expected to ease the ongoing fuel scarcity that has gripped the nation for over a month, with little progress from NNPC so far. With the capacity to meet both domestic demand and export to other African countries, the Dangote Refinery is set to play a vital role in stabilizing Nigeria’s fuel supply.
The Federal Executive Council has recently approved the sale of crude oil to the Dangote refinery in local currency, on the condition that the refinery will sell processed petrol to the country in the same currency.
