The Dangote Petroleum Refinery is preparing to start supplying Premium Motor Spirit (PMS), or petrol, soon. This follows a successful test run of the refinery’s petrol production, which has a capacity of 650,000 barrels per day. The new fuel supply is expected to potentially lower petrol prices in Nigeria.
DISTRIBUTION DETAILS: A government source revealed that the Federal Government and Dangote Group are finalizing distribution and sales plans. Initially, the Nigerian National Petroleum Company Limited (NNPCL) will be the exclusive distributor of the Dangote-produced petrol.
CHALLENGES: The refinery’s launch was delayed due to crude oil shortages and a dispute with the Nigerian Midstream and Downstream Regulatory Authority (NMDRA), which had accused the refinery of producing substandard diesel. The Federal Government has since directed crude supplies to be paid for in local currency.
MARKET STRUGGLES: Dangote has expressed frustration over international oil companies’ reluctance to sell crude directly to local refiners, leading to inflated prices. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) claimed to have supplied over 29 million barrels of crude to the refinery, but Dangote refuted this, citing only one domestic crude supply.
OUTLOOK: With the Dangote petrol rollout imminent, there is hope it will ease the current fuel scarcity and reduce prices. However, ongoing disputes and challenges in crude supply raise concerns about the stability and effectiveness of this new supply source.