NNPCL to be sole buyer of Dangote refinery oil- Report
Dangote Refinery has begun production of premium motor spirit or petrol, with Nigerian National Petroleum Company Limited as its first exclusive buyer.According to a recent Reuters report, the refinery, with a capacity of 650,000 barrels per day, is in the final stages of testing and will begin producing petrol in the coming weeks.
Devakumar Edwin, vice president of Dangote Industries Limited, also stated that the national oil company is willing to purchase its products only to meet local demand.
"We are testing the product (gasoline), and it will eventually flow 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," according to Edwin.
The report confirmed that the refinery is ready to start producing petrol in the coming weeks, with testing underway in the 650,000 barrel per day petrochemical plant.
"In accordance with the Petroleum Industry Act (PIA), NNPC Ltd. remains committed to its role as supplier of last resort, ensuring national energy security. "We are actively collaborating with relevant government agencies and other stakeholders to ensure a consistent supply of petroleum products nationwide," the NNPC stated.
He did not, however, specify when the product will be available.
It was previously reported that the NNPC admitted to owing international oil traders approximately $6 billion in subsidy obligations, a debt that has severely disrupted fuel supply to local marketers.
The shortage is caused by these traders halting petrol imports to the NNPC due to unpaid obligations.
While NNPC initially denied the allegations, the company later admitted that its outstanding debts had a significant impact on the country's ongoing fuel scarcity.
Recall that NNPC Limited recently acknowledged its debt to international oil traders, which has contributed significantly to the fuel supply shortage that is affecting local marketers.
It was previously reported that NNPC owes these traders approximately $6 billion in subsidy obligations, prompting them to stop supplying imported petrol to the company.
This financial strain has put significant strain on the company and jeopardises the long-term viability of fuel supply.
The recent announcement that NNPC will become the sole buyer of petrol from the Dangote Refinery could be a game changer for the national oil company, which is saddled with massive international debt.
By sourcing petrol solely from the Dangote Refinery, NNPC could significantly reduce importation and logistics costs, allowing local marketers to purchase fuel at lower rates.
This arrangement is expected to alleviate the ongoing fuel scarcity that has gripped the country for more than a month, with little progress from the NNPC thus far.
The Dangote Refinery, which has the capacity to meet both domestic demand and export to other African countries, is expected to play an important role in stabilising Nigeria's fuel supply.
The Federal Executive Council recently approved the sale of crude oil to the Dangote refinery in local currency, with the condition that the refinery will sell processed petrol to the country in the same currency.
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