Dangote petrol to hit market soon as crude supply issues are resolved

The much-anticipated rollout of Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Petroleum Refinery, is set to commence soon.

This development comes after the refinery, which boasts a 650,000-barrel-per-day capacity, successfully conducted a test run of its petrol production. Industry insiders have confirmed that the product will soon be available.

A government source, who wished to remain anonymous, disclosed to Punch that the Federal Government and the Dangote Group are currently ironing out the details regarding the distribution and sale of the petrol.

It was also revealed that the Nigerian National Petroleum Company Limited (NNPCL) would be the sole distributor of the Dangote-produced fuel at this stage.

This move follows a series of challenges that delayed the refinery's initial plans to launch in June. A significant obstacle was the shortage of crude oil, which was further complicated by a dispute with the Nigerian Midstream and Downstream Regulatory Authority (NMDRA).

The regulatory body had accused the refinery of producing substandard diesel. However, progress appears to have been made following the Federal Government's directive to supply crude to the refinery in local currency.

Dangote's struggles in Nigeria's oil market

The Dangote Group has long voiced its frustrations over international oil companies' (IOCs) refusal to sell crude to local refiners, opting instead to sell through foreign agents. The refinery claims this practice has led to inflated local crude prices, with IOCs allegedly prioritising Asian markets over Nigerian refineries.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently claimed it had facilitated the supply of over 29 million barrels of crude to the Dangote refinery between January and June 2024.

However, the Dangote Group refuted this claim, stating that only one crude cargo had been supplied domestically, while the rest had to be purchased from international traders.

Anthony Chiejina, the spokesperson for the Dangote Group, emphasised, "We appreciate the allocation, but we are yet to receive the majority of these cargoes. We believe Nigerian refineries should have direct access to locally produced crude rather than relying on international middlemen."

As the rollout of Dangote petrol approaches, Nigerians hope the new supply will reduce PMS's pump price. However, the ongoing disputes over crude supply raise questions about the long-term stability of this new venture.