The Nigerian National Petroleum Company Limited (NNPCL) has terminated its exclusive purchase agreement with Dangote Refinery, report said.
“Yes, it is true. We can no longer continue to bear that burden,” An official of the NNPC Ltd told Premium Times.
The termination is expected to open the market for other marketers to buy petrol directly from the refinery at prevailing market prices.
The development came after NNPC Ltd claimed in September that it was buying petrol from Dangote Refiner at N898.78 per litre and selling it to marketers at N765.99 per litre, resulting in a subsidy of nearly N133 per litre.
NNPC Ltd lifted about 103 million litres of petrol from Dangote Refinery between September 15 and 30. The refinery was able to load 2,207 of the 3,621 trucks sent to it within the period under review.
The vehicles carried just 102,973,025 litres of the planned 400,000,000 litres of petrol earmarked to be lifted from the refinery at 25 million litres per day.
The termination comes after Devakumar Edwin, vice president of Dangote Industries Limited, announced in September that the 650,000 barrels per day Dangote Refinery has begun processing petrol and that NNPC Ltd will buy its product exclusively.
NNPC Ltd’s spokesperson, Femi Soneye, while reacting to Dangote Refinery’s claim of being undermined at the time, said it was not the sole off-taker of all products from the Dangote Refinery.
NNPC Ltd said 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.
“The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd. (DRL), is determined by global market forces. The recent changes in PMS prices have no impact on the DRL or any other domestic refinery’s access to the Nigerian market,” Soneye said.
“Furthermore, we emphasise that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL. The NNPC Ltd. will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.”
“The DRL and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products.”
