By Uche Amunike
The Nigerian National Petroleum Company Limited (NNPC) is ending its agreement to exclusively purchase petrol directly from Dangote Refinery, thereby leaving the market open for other marketers to negotiate prices and purchase petrol from them.
On Tuesday, multiple sources from the NNPC and the Major Energies Marketers Association of Nigeria, confirmed that NNPCL was no longer the sole off-taker of Dangote Petrol, by giving room for other marketers in the downstream to buy products directly from them.
This was as a result of unconfirmed reports that stated that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPR) released new petrol prices that are higher than the current pump prices in various locations in the country.
Spokesman of NMDPR, George Ene-Ita did not confirm the development when contacted. He also has not replied to the text sent to him as at Press time.
However, oil marketers stated that the decision of the NNPC to stop being the sole off-taker of petrol from Dangote Refinery indicates that the government has stopped subsidy on petrol completely
Recall that an exclusive report by The Punch on September 25 stated that the government might spend N236bn monthly to subsidize petrol imported through NNPC, as well as those solely off-taken exclusively by NNPC from the Dangote Petroleum Refinery.
The report stated that NNPC shouldered a subsidy of about N3.3bn daily on Dangote petroleum, which means it might spend N99bn in 30 days to subsidize Dangote Petroleum to marketers. However, if they are no longer the sole off-taker of Dangote petrol, NNPC may save this amount of money.
Recall also, that the federal government repeatedly stated that only NNPC would off-take petroleum from Dangote Refinery after the company started the sale of PMS in September. They also maintained that crude would be sold to Dangote in Naira from October 1, further stating the following, though a financial statement released by the Federal Ministry of Finance: ‘In return, the Dangote refinery will supply PMS (petrol) 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. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.’
A senior official with a major oil marketing firm stated under anonymity on Tuesday, that the dealers have not started the direct purchase of petrol from the refinery. He however stated that NNPC had stopped to be the sole off-taker of Dangote Petrol.
Hear him: ‘It is not true that major marketers have started lifting PMS from the Dangote refinery. Rather we were made to understand that the directive to start buying directly from them (Dangote refinery) was given today (Tuesday).’
‘It was in the news yesterday (Monday), but it was formally stated today (Tuesday) that marketers should not go through NNPCL again, rather we should go straight to buy from the refinery.’
‘However, as of today, Dangote has not come up with any price. The main thing is that it is now official that marketers can now approach the refinery and buy petrol. The truth is that NNPCL is not ready to buy the product again at a subsidised cost for marketers. That is the implication of what has happened, which means that petrol subsidy has been removed completely.’
The dealer who prefererred to speak anonymously noted that prices are yet to be reviewed by both depots and filling stations and that anytime soon, Dangote Refinery would likely release its petrol price to marketers.
