…As mixed reactions trail lifting of PMS at N898/ltr by NNPC Ltd
…We sold fuel to NNPCL in Dollar — Dangote
By Oke Peter
Despite claims of the Nigerian National Petroleum Company Limited of not being the sole off-taker of refined petrol from Dangote Refinery, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun has said the products will only be sold to NNPC.
The NNPC, through Chief Corporate Communications Officer, Olufemi Soneye on Sunday had explained that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL, adding that it will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.
He explained that 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.
“NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole offtaker does not arise,” he added.
“We successfully loaded PMS at the Dangote Refinery today,” he stated. “The claim that we purchased it at N760 per litre is incorrect. For this initial loading, the price from the refinery was N898 per litre,” Soneye said.
The latest revelation of the purchase price has sparked concerns about the potential impact on pump prices.
However, the Minister who was represented by Zacch Adedeji, the Executive Chairman of Federal Inland Revenue Service (FIRS) on Friday, at the Technical Sub-Committee meeting on the sale of crude oil to local refineries in Naira, said that diesel from the Dangote Refinery will be sold in Naira to any interested off-taker, while PMS will only be sold to NNPC, NNPC will then sell to various marketers for now.
The Minister also announced the completion of all agreements and modalities for the implementation of the Federal Executive Council (FEC) approval on the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira.
FEC under the leadership of President Tinubu had approved the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira.
This initiative is aimed to reduce pressure on the Naira, eliminating unnecessary transaction costs, and improving the availability of petroleum products in the country.
“Since then, the implementation committee chaired by the Hon. Minister of Finance and the technical committee have worked intensely with NNPCL and Dangote Refinery to fashion out the details of the modalities for the implementation of the FEC approval.
“I am glad to announce that all agreements have been completed and loading of the first batch of PMS from the Dangote Refinery will commence on Sunday 15th September.
“From 1st October, NNPC will commence the supply of about 385kbpd of crude oil to the Dangote Refinery to be paid for in Naira.
“In return, the Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market to be paid for in Naira. Diesel will be sold in Naira by the Dangote Refinery to any interested offtaker.
“PMS will only be sold to NNPC, NNPC will then sell to various marketers for now,” he said.
He added that all associated regulatory costs (NPA, NIMASA, etc.) will also be paid for in Naira
The government, according to the minister, was also setting up a one-stop shop in Lagos, that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.
…We sold fuel to NNPCL in Dollar — Dangote
The fight for the Naira to regain its strength against the Dollar is not yet uhuru as the Dangote Refinery has disclosed that it sold Premium Motor Spirit (PMS) to The Nigerian National Petroleum Company Limited (NNPCL) in dollars.
Group Chief Branding and Communications Office of Dangote, Anthony Chiejina, disclosed this in a statement on Sunday.
Chiejina was reacting to the claim of NNPCL that it bought fuel from Dangote Refinery at N898 per litre.
In its statement, Dangote Refinery said, “Our attention has been drawn to a statement attributed to NNPCL spokesperson, Mr. Olufemi Soneye, that we sell our PMS at N898 per litre to the NNPCL.
“This statement is both misleading and mischievous, deliberately aimed at undermining the milestone achievement recorded today, September 15, 2024, towards addressing energy insufficiency and insecurity, which has bedeviled the economy in the past 50 years.
“We urge Nigerians to disregard this malicious statement and await a formal announcement on the pricing, by the Technical Sub-Committee on Naira-based crude sales to local refineries, appointed by His Excellency, President Bola Ahmed Tinubu GCFR, which will commence on October 1, 2024, bearing in mind that our current stock of crude was procured in dollars.
“It should also be noted that we sold the products to NNPCL in dollars with a lot of savings against what they are currently importing. With this action, there will be petrol in every local government area of the country regardless of their remote nature.
“We assure Nigerians of availability of quality petroleum product and putting an end to the endemic fuel scarcity in the country,” the statement read.
…We will give Dangote Refinery, NNPC, others “a chance to reduce” fuel price
Responding to widespread queries about the petrol pricing issue, Edun began by congratulating Alhaji Aliko Dangote of Dangote Refinery and Petrochemical Company, NNPC, led by the group CEO, Mr. Mele Kyari, the Ministry of Finance, and the Chairman of the Federal Inland Revenue Service (FIRS) for their respective contributions thus far.
He expressed the view that Nigerians can look forward to energy security and energy sufficiency, adding, however, that relevant stakeholders “can also address the issue of cost.”
Edun predicted that with sustained local petrol distribution, the fuel pump price will ultimately reduce.
He added that “since today marks the commencement of petrol lifting from the Dangote Refinery, the federal government must give relevant oil stakeholders a chance to reduce petrol prices.”
He said, “We’re expecting that as this refinery, and even others, ramp up production, scale, and achieve greater economies of scale, there should be the opportunity—and there is definitely the potential—to reduce their costs, which should be passed on to the consumer.
“So, we have to give them a chance. They have just started, and they have done very, very well.”
“It’s a triumph for Alhaji Aliko Dangote, it’s a triumph for Mr. President, above all, but it’s also a very good day for Nigerians, and we look forward with optimism.”
…PMS price: SERAP sues Tinubu, seeks compulsory probe of NNPC Ltd
Meanwhile, the Socio-Economic Rights and Accountability Project (SERAP) has asked the Federal High Court Abuja to mandate the reversal of the fuel pump price to N600 per litre.
This was disclosed in SERAP’s statement on September 15, 2024, signed by its Deputy Director, Kolawole Oluwadare.
The lawsuit challenges President Bola Tinubu’s “failure to direct the Nigerian National Petroleum Company Limited (NNPCL) to reverse the apparently unlawful increase in the pump price of petrol and to probe the allegations of corruption and mismanagement in the NNPCL.”
In the suit marked FHC/ABJ/CS/1361/2024, SERAP is asking the court “to compel President Tinubu to direct the NNPCL to reverse the unjust, illegal, unconstitutional, and unreasonable increase in the price of petrol from N845 per litre to N600 per litre.”
Joined as respondents in the case are the Office of the Attorney General of the Federation and Minister of Justice and the NNPCL.
The group argues that the increase in petrol price is causing immense hardship to Nigerians, even as the economic situation in Nigeria deteriorates, thereby pushing people further into poverty.
In the suit, SERAP’s lawyer, Ebun-Olu Adegboruwa, SAN, stated that the increase in petrol price constitutes a fundamental breach of what the constitution guarantees and the country’s international human rights obligations.
According to him, increasing petrol prices at a time when millions of Nigerians continue to face “worsening economic conditions” is entirely inconsistent with constitutional and international obligations to ensure minimum living conditions compatible with human dignity.
“Corruption in the oil sector and the lack of transparency and accountability in the use of public funds to support the operations of the NNPC have resulted in persistent and unlawful hikes in petrol prices,” he added.
He insisted that holding the NNPC accountable for alleged corruption and mismanagement in the oil sector would serve legitimate public interests.
“The arbitrary increase has placed a disproportionate burden on the marginalised and most vulnerable sectors of society, particularly those disadvantaged by poverty.
“The increase is seriously jeopardising their living conditions, as well as individuals’ physical, emotional, and personal development, and intensifying and worsening socioeconomic conditions in the country.
“The fundamental right to life includes not only the right of every Nigerian not to be deprived of his/her life arbitrarily but also the right to access conditions that guarantee a dignified existence,” he said, urging the court to order the fuel pump price reversal.
SERAP is also asking the court “to compel President Tinubu to direct Mr. Lateef Fagbemi, SAN, and appropriate anti-corruption agencies to probe the allegations of corruption and mismanagement in the NNPC, including the spending of the reported $300 million ‘bailout funds’ collected from the Federal Government in August 2024, and the $6 billion debt it owes suppliers, despite allegedly failing to remit oil revenues to the treasury.”
While no date has been fixed for the hearing of the case as of the time of this article, the respondents are entitled to give a formal response to SERAP’s allegations by way of court affidavits.
…As NNPC Ltd trucks commence lifting petrol at Dangote Refinery
In a historic development, the first set of trucks owned by the Nigerian National Petroleum Company (NNPC) Limited have commenced loading premium motor spirit (PMS), popularly known as petrol, at its gantry.
This development was announced by Dangote Group in videos posted on its X, formerly Twitter, platform showing the trucks stationed at the gantry on Sunday.
“First set of trucks set for loading of PMS at the Dangote Petroleum Refinery,” the company said.
According to the spokesperson for the NNPC, Olufemi Soneye, as of Saturday afternoon, NNPCL had deployed over 100 trucks, with hundreds more en route.
“In preparation for the Dangote Refinery’s scheduled petrol loading on Sunday, September 15, 2024, NNPC Ltd. has been mobilising trucks to the refinery’s fuel loading gantry in Ibeju-Lekki,” NNPC said.
“As of Saturday afternoon, NNPC Ltd. had deployed over 100 trucks, with hundreds more en route.”
…Policies made us abandon 1,200km of subsea gas pipeline plans — Dangote Group
Meanwhile, the Vice President of Dangote Industries Limited, Mr. Devakumur Edwin has disclosed the reason for jettisoning plans to build a 1200km subsea gas pipeline to bring gas from the sea to the shore.
He stated this during a space on X, formerly Twitter, monitored by Nigerian NewsDirect where he noted that the company had earlier planned to process the gas for use by local companies and businesses.
According to him, “the government’s policy then did not allow a single player in upstream, midstream and downstream.”
He further noted that another government policy that prevented them from executing the project was the government’s ownership of gas pipelines across the country regardless of who built them.
He said, “Nigeria has a lot of gas which is trapped in the sea because there is no way to bring it to the shore. We wanted to invest in a network of 1,200km of subsea gas pipeline to bring the gas to the shore, and our idea was not to export as NLNG because there is absolutely no difference between exporting the crude or the gas because it is raw material which you can produce a range of petrochemical materials from.
“The gas pipeline was supposed to bring in 2 billion scf of gas. We did a one-year study by hiring two ships to identify the route through which we lay the subsea gas pipeline so that the gas can be collected and evacuated. But then, the government’s policy was that there can be one player upstream, midstream and downstream.
“We were trying to find a solution to that. Then the government said all gas pipelines once you build it, you’ll hand it over to the Nigeria Gas company. So that was how the project was abandoned.”
The Vice President further noted the company’s had plans in upstream oil production but has invested up to $23 billion in the refinery and fertiliser plant.
Nigeria, home to Africa’s largest natural gas reserves exceeding 200 trillion cubic feet, continues to flare gas from its oil fields due to inadequate processing infrastructure and capital limitations.
Recall that the Nigerian National Petroleum Company Limited (NNPCL) had earlier announced plans to increase the country’s natural gas reserves to 600 trillion cubic feet, tripling its current capacity. NNPCL’s Group CEO, Mele Kyari, stated that this plan is key to Nigeria achieving its net-zero emissions target by 2060.
Additionally, in January, NNPCL secured a deal with a South Korean consortium, led by Daewoo E&C, to advance gas development projects.
Furthermore, Nigeria National Petroleum Corporation (NNPC) Limited alongside French energy major, TotalEnergies, signed a deal to invest $550 million to develop gas facilities in oil-rich Rivers State. These efforts align with the nation’s Energy Transition Plan, focusing on low-carbon emissions strategies, including the expanded use of natural gas, to meet its 2060 net-zero goals.
…NACCIMA lauds Dangote refinery’s Naira-based oil sales
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has commended the recent move by Dangote Refinery to commence naira-denominated crude oil purchases and petroleum product sales.
According to the Association, the development marks a significant milestone in Nigeria’s efforts to strengthen its economic sovereignty and reduce dependence on foreign currency.
National President of NACCIMA, Dele Kelvin Oye in a statement, commended both Dangote Refinery and the Federal Government of Nigeria for initiating the move, noting that the naira-to-naira transaction model for crude oil and petroleum products, such as Premium Motor Spirit (PMS) and diesel, will positively impact the nation’s macroeconomic environment.
Oye opined that the elimination of large foreign exchange demands by oil marketers will ease pressure on the naira, helping stabilise and potentially strengthen the currency.
This, he said, coupled with prudent monetary policies from the Central Bank of Nigeria (CBN) and reduced government deficit spending, could lead to long-term economic benefits.
“The elimination of the huge foreign exchange demand by oil marketers will significantly ease the pressure on the naira, freeing up foreign exchange for other critical sectors of the economy.
“This, in turn, will contribute to the stabilisation and potential appreciation of the naira, provided that the Central Bank of Nigeria (CBN) continues to deploy prudent monetary policies and the government further reduces deficit budgeting and recurrent expenditure,” Oye noted.
He also highlighted the potential for increased availability and affordability of fuel for Nigerian consumers.
“The seamless integration of the Dangote Refinery into the domestic supply chain, with NNPC Ltd. providing crude oil and the refinery supplying equivalent value of PMS and diesel in naira, will enhance the availability and affordability of petroleum products for Nigerian consumers.
“This development is a testament to the government’s commitment to addressing the longstanding challenge of fuel scarcity and price volatility in the country,” he said.
NACCIMA applauded the efforts of the technical and monitoring committees involved in the execution of this initiative, expressing optimism that it would contribute to Nigeria’s economic diversification and reduce its reliance on oil exports.
The organisation reaffirmed its support for the government and the Dangote Refinery in ensuring the successful implementation of this initiative.
“As the Nigerian business community, we are optimistic that this historic achievement will pave the way for further economic diversification, reduced reliance on oil exports, and the overall strengthening of the Nigerian economy. We stand ready to support the government and the Dangote Refinery in the successful implementation of this game-changing initiative.”
