Federal Government, Dangote Refinery Set September for Petrol Rollout

The Federal Government’s committee, tasked with overseeing the sale of crude oil to local refineries in naira, has reached a significant agreement with the Dangote Petroleum Refinery. This milestone will see the rollout of Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Refinery in September 2024. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made the announcement during a meeting with the Implementation Committee in Abuja. The government also revealed that the sale of crude oil to Dangote Refinery and other domestic refineries will officially commence on October 1, 2024. The Ministry of Finance, in an update shared on its official X (formerly Twitter) page, highlighted the meeting’s focus on reviewing key initiatives, including the transition to naira payments for crude oil sales. Various stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank, were assigned critical roles to ensure the smooth implementation of this transition. The Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, confirmed that the first delivery of PMS from Dangote Refinery is expected next month under existing agreements. Additionally, updates on the Port Harcourt and Dangote Refineries were provided, with significant production increases anticipated from November 2024.

Minister Wale Edun stressed the importance of transparency in this process, directing the Technical Sub-Committee to finalize details and prepare a report for the President. He emphasized that the directives are on track for implementation starting in September. This development follows the Federal Executive Council’s approval of President Tinubu’s proposal to halt the sale of crude oil to local refineries in foreign currency. The council approved that the 450,000 barrels meant for domestic consumption be sold to Nigerian refineries in naira, with the Dangote Refinery serving as a pilot. This move aims to stabilize the pump price of refined fuel and maintain a favorable dollar-naira exchange rate. The Dangote Refinery, which currently requires 15 cargoes of crude oil annually, has faced challenges in accessing crude due to issues with International Oil Companies (IOCs). These companies have been accused of prioritizing sales to foreign agents, leading to increased local crude prices.

The Crude Oil Refiners Association of Nigeria (CORAN) has expressed its support for the naira-based crude supply initiative, arguing that it will reduce petrol costs and strengthen the naira. CORAN has called for a crude supply contract with operating refineries and conditional contracts for those in the construction stages, urging an executive order to enforce this directive. Amid these developments, the Arewa Consultative Forum (ACF) has voiced its support for the Dangote Petroleum Refinery, describing the facility as a source of national pride. The ACF commended Aliko Dangote for his visionary leadership and patriotic efforts in establishing the world-class refinery.