*NNPC sets Lagos price at N950/litre, Borno’s at N1,019 for Dangote fuel. *National oil company assures fuel queues to disappear in few days. *Declares naira-for-crude arrangement to ease FX volatility. *Fuel scarcity in Nigeria over, Otedola says
The federal government yesterday expressed excitement over the commencement of lifting of Premium Motor Spirit (PMS), also known as petrol from the 650,000 bpd Dangote Refinery in Lagos, stressing that it marked the return of industrialisation in Nigeria.Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who led the government delegation to the refinery, described the event as epoch-making and a major win for local refining.
“This is the resumption of Nigeria’s march toward industrialisation. It represents a return to what we once had—local refining and local supply of petroleum products in the Nigerian market. It has been decades since we last achieved this, but we have it today,” he said.
The minister, who was accompanied by Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS) and Chairman of the Technical Sub-Committee on naira-based crude sales to local refineries, also stated that the initiative will ensure energy self-sufficiency and security in Nigeria.
He explained that the availability of the product to Nigerians will end perennial scarcity and long queues. He noted that this aligned with President Bola Tinubu’s vision of adding value to raw materials before they leave the country.According to him, Tinubu originated the concept of the free trade zone during his term as governor of Lagos State.
“Today, you have taken an important step towards energy self-sufficiency in Nigeria. We have advanced toward energy security and the implementation of the government’s policy of boosting domestic investment.
“It is President Tinubu’s vision that no raw material should leave Nigeria’s shores without some form of value being added. Commendation is due to His Excellency, who facilitated the supply of crude to local refineries in naira by ensuring that NNPC provides crude to these refineries,” he added.
Edun lauded the President of Dangote Industries Limited, Dangote, and his team for restoring Nigeria’s status as a producer of refined products, nearly three decades after the country ceased local refining.He praised Dangote for his patriotism and for exemplifying the can-do spirit of Nigeria, despite scepticisms from many quarters about the feasibility of establishing a refinery.
“We congratulate Dangote, Africa’s foremost businessman and industrialist, and arguably one of the top investors in the world, on this day of triumph and success. They said it couldn’t be done, that we could not produce PMS from this facility, but today we are all witnesses to the commencement of PMS loading here.
“This refinery is producing PMS that is sufficient for the entire Nigerian market, with a surplus for export. We call on other domestic refiners to not only supply the local market but also to change the narrative by producing petroleum products for the sub-region and beyond. This will generate additional foreign exchange revenue for the betterment of the economy. We are thrilled that this day has arrived,” he said.
Praising the quality of the products from the refinery, Edun noted that the facility’s global competitiveness enables it to export its products and sets a benchmark for Nigerian companies to compete favourably on the international stage.He also commended the technical sub-committee on naira-based crude sales to local refineries for finalising all formalities, ensuring a smooth supply of crude to local refineries. The minister added that Tinubu was also focusing on enhancing food security.
In the same vein, Vice President of Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, stated that the commencement of PMS production from the refinery fulfilled Dangote’s vision of addressing energy supply challenges in Nigeria.He emphasised that it was a point of pride that a Nigerian company has designed and built the world’s largest single-train refinery complex, which will not only make Nigeria self-sufficient in refined products but also a net exporter.“If you consider the refinery’s capacity for PMS alone, processing 52,000 barrels of crude each day generates more than 54 million litres of PMS. Additionally, the refinery can produce other products. Specifically, 44 per cent of the refinery’s capacity can meet 100 per cent of domestic needs, while 56 per cent is allocated for export. It is indeed a massive refinery,” he said.
Edwin maintained that the refinery will significantly benefit the country’s economy by reducing Nigeria’s foreign exchange demand by at least 40 percent while also generating foreign earnings through exports.“It will not only substitute imports but also boost forex generation through export. We will save foreign exchange in two ways: first, by reducing expenditures on importing petrol, jet fuel, diesel, and other products, and second, through the revenue generated from exports,” he said.
He also addressed concerns about tankers overwhelming the Ibeju-Lekki area, as seen in Apapa. Edwin assured that the refinery has made provisions for loading petroleum products via its jetty and emphasised that it includes a self-sufficient marine facility capable of handling the world’s largest vessels.He said that for 52 years, the President of Dangote Group, Dangote had been trying to solve the problem of Premium Motor Spirit (PMS) or petrol supply in Nigeria using local solution, saying that finally, the solution had come.
Edwin said: “My President has been showing in his presentations that 52 years ago, we were trying to see how to solve the problem of PMS supply and the queues. Now, after 52 years, we have a solution. And the solution is local production of PMS and it is from a Nigerian oil company. And an Engineering, Procurement and Construction (EPC) contractor, it was constructed by a Nigerian company.“So, it’s a matter of pride that a Nigerian oil company, constructed by a Nigerian-owned company, is able to generate PMS from the local crude. This will not only meet the entire requirement of Nigeria, but can also have surplus to export. So, it is a time and moment of great pride to every Nigerian.”
Also, early this morning, the NNPC released estimated prices of petrol obtained from the Dangote Refinery in its retail stations across the country, stressing that in line with the provisions of the Petroleum Industry Act (PIA), petrol prices are not set by government, but negotiated directly between parties.“The NNPC can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1, 2024.“The NNPC assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100 per cent to the general public.
In the attached document, the NNPC stated that fuel from the Dangote refinery will sell for N950.22 per litre in Lagos; N960.22 in Oyo; N980.22 in Rivers; N992.22 in Abuja; N999.22 in in Kaduna; N999.22 in Kano; N999.22 in Sokoto and N1,019 in Borno, based on the September pricing template.A breakdown indicated that the final price from the Dangote refinery was N898.78, according to the statement, while distribution in Lagos is N15 per litre, inspection fee is N0.97, NMDPRA fee is N8.99, with an expected margin of N26.48.This is coming just as the NNPC has assured Nigerians that the lingering petrol scarcity and the long queues at filling stations will disappear in the next few days with the loading of refined petroleum products which commenced at the Dangote Refinery in Lagos yesterday.
The national oil company also stressed that the pump price of petrol from the refinery would not be fixed by either the NNPC or Dangote Refinery, saying it would henceforth be purely determined by market forces.Speaking during an interactive session in Lagos, at the weekend, the Executive Vice President, Downstream, NNPC, Mr. Dapo Olusegun, also dispelled the insinuation that the national oil company had been frustrating the take-off of the 650,000 barrels per day refinery which is owned by Africa’s richest man, Dangote.
Commenting further on the distribution of petrol productions, Olusegun said: “There is a process for getting premium motor spirit from either the gantry at Dangote Refinery or to the vessels and there is a process of taking it from there to the pump. So, as we have started loading products, definitely, in some places, you might get fuel to buy at the pump the same day.“For example, if a truck loads at Dangote Refinery and it is going to a filling station at Epe in Lagos, you will probably get the product same day. But if is going all the way to Kano, you won’t expect to get it that quickly.“And if it going on the vessel to Calabar, before it gets to the trucks, the supply chain continues.
So, it is not impossible to get to the filling station the same day after loading, but that is limited to the filling stations that are close to the refinery.”Olusegun pointed out that there was no reason why the NNPC would have frustrated the take-off of the privately owned refinery, saying commenters keep forgetting that the NNPC has a stake of 7.25 per cent in the asset.“Now it wouldn’t make sense for a shareholder to seek to frustrate a company that it has equity participation in. I can tell you that the NNPC has not at any time done anything to frustrate Dangote Refinery.
The reverse is the case. NNPC has gone out of its way to support Dangote Refinery, which is what we expect a shareholder to do.“So, when you talk about delaying Dangote crude cargoes, all of these are business transactions. Some terms and conditions guide every type of transaction and the trade of crude oil and the trade of refined products is a global business.“The terms and conditions are global terms and conditions and so there are conditions to be met before a cargo of crude can be released. If those conditions are not met, then it’s just normal business to wait until those conditions are met before you can release the cargo. So, that’s basically what it is. So it’s not anything. It’s not anything personal, we’re running a business and Dangote is running a business.“All of the marketers and all companies are running businesses.
You have terms and conditions that we all sign off to.“It’s just us keeping to the terms and conditions of our business transactions. I can tell you, there’s nothing unfair going on. Everything that’s going on is according to the terms and conditions signed by both parties, and that is the way business should be done,” he explained.Olusegun, emphasised that with the Petroleum Industry Act (PIA), the national oil company is now a going concern and no longer a corporation that relies on the government for support.“Today, if the NNPC starts making losses and cannot meet its obligations, the government cannot bail it out, because it will be illegal for the government to do that as it is against the law,” he said.Responding to a question on the expected amount the NNPC would fix the pump price of petrol to be lifted from the Dangote Refinery, the executive vice president said: “Let’s imagine companies like Total, Shell, NIPCO, can we say that they are the ones to fix the price of petrol? Absolutely no.“The same thing applies to NNPC.
The NNPC is just like any of these businesses. the only difference is that the shares of NNPC are entirely owned by organs of government – Ministry of Finance Incorporated (MOFI) and Ministry of Petroleum Incorporated. That’s the only thing – the shareholders of NNPC.“So the NNPC is not a regulator. The NNPC has no regulatory powers and cannot fix prices. That’s why citizens must study the PIA to understand that things have changed. I’ve seen that there’s so much misinformation out there, even within even within government settings, understanding the new NNPC.“What we’ve done in this specific case with Dangote Refineries is that we went into the room and we negotiated like every other business would do. Dangote comes into the room and says ‘I want this much for my petrol,’ and we say, ‘No, we are paying this amount,’ and we negotiated to come to some agreements, and that is what has happened.
So it’s neither we (NNPC) nor Dangote that sets the price. It’s basically the market forces that set the price.“The price is indexed to the Brent. If the Brent moves up, the price moves up and if the Brent moves down the price moves down. We don’t determine Brent’s price, they don’t determine Brent, it is the market that does,” he added.Olusegun, described the naira-for-crude and naira-for-product arrangement that was approved by the Federal Executive Council (FEC) as a payment solution that would help ease foreign exchange volatility.He confirmed that: “For the immediate off-take, that is from September 15 to the end of September, we would be paying Dangote in dollars. Why? That is because the crude that Dangote used in producing the petrol that would be taken was paid for in dollars, so it is fair that we buy the product in dollars.“But from October 1, crude supplied to Dangote and products taken up by us would be paid for in Naira.
Here is how it works: It is a zero-sum arrangement. In this instance, for October now, we have reached an agreement to sell 385,000 barrels a day to Dangote Refinery.”Meanwhile, billionaire businessman, Femi Otedola, yesterday said that with the commencement of refining of petrol by the Dangote facility, the age-long challenge of fuel scarcity was over.“Kudos to President Bola Tinubu for making this a reality! Fuel queues are now a thing of the past as Dangote Refinery starts loading PMS today Sunday 15 September 2024,” Otedola said on his X handle.Earlier, the Chairman of Geregu Power Plc as well as First Bank Holdings Plc, Otedola, had hailed Tinubu on his support for the new Dangote refinery located in Lagos.
Describing the President’s backing for the project as ‘unwavering’ Otedola in a message on his X handle, stated that Tinubu’s support for the 650,000 barrels per day, $20 billion facility had been instrumental to the success of the project.“First and foremost, I want to extend my heartfelt congratulations to President Bola Tinubu for his unwavering support and belief in actualising this monumental achievement under his administration.“This day belongs to every Nigerian who has dared to dream of a better future. Congratulations to our great nation—today, we all stand a little taller,” Otedola stated.In his message to his friend, Dangote, on the successful completion of testing of the product and imminent release of petrol to the public, Otedola had praised Africa’s richest person for never giving up on the dream shared by both of them.
Also, confusion continued to trail the actual pricing of petrol from the refinery last night as the facility disowned the N898 price per litre announced by the NNPC spokesman, Olufemi Soneye.“Our attention has been drawn to a statement attributed to NNPC spokesperson, Mr. Olufemi Soneye, that we sell our PMS at N898 per litre to the NNPC.“This statement is both misleading and mischievous, deliberately aimed at undermining the milestone achievement recorded today (yesterday), September 15, 2024, towards addressing energy insufficiency and insecurity, which has bedevilled the economy in the past 50 years.
“We urge Nigerians to disregard this malicious statement and await a formal announcement on the pricing, by the Technical Sub-Committee on naira-based crude sales to local refineries, appointed by His Excellency, President Bola Tinubu, which will commence on October 1, 2024, bearing in mind that our current stock of crude was procured in dollars.“It should also be noted that we sold the products to NNPC in dollars with a lot of savings against what they are currently importing. With this action, there will be petrol in every local government area of the country regardless of their remote nature.“We assure Nigerians of availability of quality petroleum product and putting an end to the endemic fuel scarcity in the country,” a statement by the Group Chief Branding and Communications Officer, Dangote Group, Anthony Chiejina, said.
THISDAY
