The Dangote Petroleum Refinery is on the verge of rolling out its Premium Motor Spirit (PMS), commonly known as petrol, into the Nigerian market. This development follows the successful test-run of the refinery's production line, which has a capacity of 650,000 barrels per day.
According to industry insiders, who chose to remain anonymous, the release of the petrol is imminent. The Federal Government and the Dangote Group are currently finalizing arrangements for the distribution of the product to ensure a smooth rollout. A government source disclosed that only the Nigerian National Petroleum Company Limited (NNPC) will be authorized to sell the refinery’s petrol at this initial stage.
The journey to this point has not been without challenges. Initially slated for a June launch, the release of petrol from the Dangote refinery faced delays due to a shortage of crude oil supply and a conflict with the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA). The regulatory authority had accused the refinery of producing substandard diesel, which led to a standoff that required the intervention of the Federal Government. The government's decision to allow the refinery to pay for crude in local currency appears to have resolved some of the outstanding issues, facilitating the refinery's operations.
Additionally, local refineries, including Dangote’s, have repeatedly criticized international oil companies (IOCs) for their reluctance to supply crude oil directly to Nigerian refiners. The IOCs have been accused of prioritizing foreign buyers, particularly in Asia, over local refineries, thereby exacerbating the crude shortage. The Dangote Group has also raised concerns over the IOCs' pricing practices, alleging that crude oil is sold at rates significantly higher than the official price set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Recent announcements by the Federal Government indicate that a new crude oil supply agreement, set to commence in October, may provide some relief to the refinery. However, tensions remain, as evidenced by a recent public dispute between Dangote Refinery and the NUPRC over the alleged supply of 29 million barrels of crude oil to the refinery. The Dangote Group has accused the commission of failing to enforce the Domestic Crude Supply Obligations (DCSO) regulations effectively, stating that the refinery has yet to receive adequate crude supplies locally.
As the refinery prepares to launch its petrol into the market, all eyes are on the outcome of these negotiations and the impact on Nigeria’s energy sector. The successful rollout of petrol from the Dangote refinery could mark a significant turning point in the country’s quest for self-sufficiency in petroleum products.
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