After prolonged negotiations, the Federal Government and Dangote Refinery have reached a landmark agreement on commercial terms for crude oil supply and petroleum product distribution.
Effective tomorrow, the Lagos-Lekki Free Zone-based refinery will begin distributing 25 million liters of petrol per day, ramping up to its 650,000-barrels-per-day capacity.
The Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacceus Adedeji, who represented the Minister of Finance and Chairman of the Presidential Committee on the Sale of Crude Oil and Refined Products for Domestic Consumption in Naira, Wale Edun, disclosed this during the committee’s briefing yesterday in Abuja.
In accordance with the agreement, Adedeji revealed that the Nigerian National Petroleum Company Limited (NNPC) has been designated as the exclusive buyer of petrol produced by Dangote Refinery. Conversely, diesel output from the facility will be marketed directly to any interested petroleum products marketer, without restriction.
Adedeji further disclosed that all transactions related to Dangote Refinery, including crude oil supply, will be denominated in naira. Specifically, payments for petrol, diesel, and associated costs from the $20 billion refinery will be made exclusively in the Nigerian currency.
Adedeji stated, “Supply of petrol exclusively to the Nigerian National Petroleum Company Limited NNPC while other refined products will be available to all marketers. This decision follows a briefing of the Presidential Committee on the sales of crude oil and refined products for domestic consumption in naira.
“I’m glad to announce that all agreements have been put in place and the loading of the first batch of PMS as already announced by NNPC will commence on Sunday, 15th September 2024. And from 1st of October, NNPC will commence the supply of crude oil to Dangote Refinery to be paid for in naira. In return, Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market to be paid for in naira.
“The technical committee that worked to flesh out this initiative, I mean this committee will transition to an implementation, Execution and Monitoring Committee that will be working out of the Lagos for the next three to six months.”
Dangote is expected to be Africa's biggest oil refinery and the world's biggest single train facility.
