NNPC finally steps down as middleman in Dangote Refinery petrol purchases

The Nigerian National Petroleum Company Limited (NNPC) is ending its exclusive purchase agreement with Dangote Refinery, opening up the market for other marketers to buy petrol directly from the refinery.

This means NNPC will no longer be the sole off-taker, and marketers can now negotiate prices directly with Dangote Refinery. This development aligns with the current practices for fully deregulated products, where refineries can sell directly to marketers on a willing buyer, willing seller basis.

Earlier in September, Devakumar Edwin, vice president at Dangote Industries Limited, said the 650,000 barrels per day Dangote Refinery has begun the processing of petrol. Mr Edwin explained that NNPC Limited would buy its product exclusively.

But the NNPC, in reaction to a statement that the Dangote Refinery Limited is being undermined by actions of the company at the time, said it was not the sole offtaker of all products from the Dangote Refinery. It said the refinery was free to sell its petrol to any marketer.

The NNPC explained that the Dangote Refinery and any other domestic refinery were free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products such as diesel, aviation fuel and kerosene. But on 15 September, the NNPC began loading petrol from the Dangote Refinery.

Although some major petroleum marketers were later reportedly approved to lift the product from the refinery under an agreement with NNPC Ltd, independent marketers remained excluded. [CONTINUE READING HERE]>>>>