Nigeria’s presidential committee announced on Friday that NNPC Limited will distribute gasoline from the 650,000-barrel-per-day Dangote Refinery, ending previous distribution delays.
The $20 billion refinery, constructed by Nigerian billionaire Aliko Dangote, had commenced gasoline processing last week, but distribution was delayed due to conflicts over offtake rights and pricing.
Zacch Adedeji, head of Nigeria’s tax authority, confirmed that “all agreements have been finalized,” and “the first batch of Premium Motor Spirit (Gasoline) will begin loading on Sunday”.
In return for crude oil, Dangote will supply gasoline and diesel of equivalent value to the domestic market, with transactions settled in naira.
The Nigerian government had previously committed to facilitating crude sales to Dangote in naira.
Dangote’s diesel, mainly exported so far, will now be sold to local traders in naira. Meanwhile, NNPC will exclusively handle the distribution of gasoline, selling it in bulk to fuel traders and at its gas stations.
Currently, only about 5% of local fuel traders are buying from the Dangote Refinery, which is limited to selling 29 tankers of diesel daily.
A refinery executive noted that local traders are facing challenges with the refinery’s retail pricing, which they argue is harming their businesses.
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