The Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery have engaged in a public dispute over the pricing of petrol supplied by the refinery, coinciding with the first delivery of the product to NNPCL.
NNPCL received its initial batch of petrol from Dangote Refinery at N898 per litre, which has become a point of contention between the two entities. Dangote Refinery has challenged this figure, asserting that it does not align with any pre-established pricing agreements.
According to Dangote Refinery, the price of N898 per litre reflects the dollar equivalence due to the imported crude used for refining.
In a statement, Anthony Chiejina, Dangote’s Group Chief Branding and Communications Officer, criticized the claims made by NNPCL, describing them as “misleading and mischievous.”
Chiejina accused NNPCL of attempting to undermine the refinery’s achievements and urged the public to disregard the statements.
He emphasized that a formal pricing announcement would be made by the Technical Sub-Committee on Naira-Based Crude Sales to Local Refineries, appointed by President Bola Ahmed Tinubu, starting October 1, 2024.
Chiejina further defended the pricing strategy by noting that the product was sold in dollars, which resulted in cost savings compared to imported alternatives. He assured that Dangote Refinery’s operations would help address Nigeria’s fuel scarcity issues by ensuring widespread distribution of quality petrol.
Amid the pricing dispute, there are also concerns about the adequacy of the petrol supply. Dangote Refinery, which boasts a production capacity of 650,000 barrels per day, was expected to deliver 25 million litres of petrol to NNPCL. However, only 16.8 million litres were delivered, representing a 38.8% shortfall.
The Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has reported a 33.58% decrease in domestic petrol consumption, from 66.7 million litres per day to 44.3 million litres per day.
The reduced supply from Dangote Refinery raises concerns about the sufficiency of available petrol to meet national demand.
In a formal notification, Dangote Refinery confirmed the release of 12,200 metric tons of Premium Motor Spirit (PMS) from its Lekki Free Trade Zone facility to NNPCL.
To manage distribution, NNPCL has mobilized over 300 trucks and a vessel for transport. Prior to the delivery, NNPCL issued a Letter of Credit for over $120 million to cover the anticipated 25 million litres, only to be informed later of the reduced volume.
The petrol lifting forms part of a “naira for crude” arrangement, under which crude oil is sold to local refineries and petroleum products are purchased in naira.