New developments suggest that the Dangote Petroleum Refinery might not meet its anticipated petrol rollout scheduled for Monday, as previously announced by Alhaji Aliko Dangote, the President of Dangote Group, with projections to commence in the second week of August 2024.
Despite earlier expectations, indications from NewsNow show that the refinery’s capacity of 650,000 barrels per day may not see a petrol rollout today.
Sources close to the project have reassured NewsNow that preparations are in place for the commencement of Premium Motor Spirit production by the end of August.
An anonymous official mentioned, “The refinery is all set to introduce petrol this month. A continual crude supply is vital for its operations without interruption.”
Despite this optimism, there are concerns about a potential setback due to a ongoing crude supply crisis affecting the refinery’s plans to launch the much-anticipated Premium Motor Spirit into the market on schedule.
The refinery is actively expediting efforts to start petrol production this August, awaiting the 29 million barrels of crude oil from the Nigerian Upstream Petroleum Regulatory Commission.
Insider sources affirm that the refinery is fully prepared to kick off petrol production this month, although the limited crude supply could pose challenges to the process.
It was disclosed, “We are committed to initiating PMS sales this August, despite historical constraints posed by the inadequate crude oil supply.”
Another aspect highlighted was the pending delivery of 29 million barrels of crude oil from the NUPRC, which hasn’t fully materialized, affecting the refinery’s operational plans.
While plans are underway for petrol rollout in August, the local sale of the product may be questionable due to pricing disparities, as noted by industry experts.
Market competitiveness issues arise from the pricing structure offered by the Nigerian National Petroleum Company, making local trading less feasible for entities like Dangote’s refinery.
An expert highlighted, “Dangote’s ability to sell domestically hinges on competitive pricing. Sourcing crude internationally versus selling below cost locally poses significant challenges.”
Amidst these developments, workers at the refinery indicate readiness for petrol sales, albeit uncertain of the exact commencement date and pricing information.
Regarding the controversial 29 million barrels of crude oil supply, conflicting statements were exchanged between Dangote refinery and the NUPRC, raising questions about the actual supply chain dynamics.
As issues unfold, it remains to be seen how the Dangote Petroleum Refinery navigates the complexities of local crude supply and pricing to fulfill its goals in the fuel market.
In a recent statement, it was acknowledged that enforcing the domestic crude supply obligation as specified in the PIA might not be feasible due to concerns about the ‘sanctity of contracts,’ stated Chiejina.
During a conversation on Sunday, NUPRC’s spokesperson, Olaide Shonola, mentioned that the commission was investigating the refinery’s claim of not receiving the allocated 29 million barrels.
As we move further into August, questions arise about the Dangote refinery’s ability to meet the promised petrol supply this month, as pledged by the President of the Dangote Group, Alhaji Aliko Dangote.
The concerns of Nigerians have arisen from the ongoing crude shortage challenges faced by the facility since it started operations a few months back.
Dangote had to postpone petrol supply multiple times since the refinery commenced selling diesel and aviation fuel back in April.
Back in May, Dangote assured Nigerians that fuel importation in Nigeria would cease once petrol sales began in June at the refinery.
At the Africa CEO Summit in Rwanda, Dangote vowed that the refinery would eliminate the need for monthly importation of about one billion liters of petrol in Nigeria from June onward.
According to him, Nigeria would no longer rely on petrol imports once the Dangote refinery’s plans were implemented starting in June.
Dangote later informed the public in June that the planned release of petrol into the market that month was no longer viable, which sparked reactions.
During a tour of the facility with Governor Babajide Sanwo-Olu of Lagos State and other dignitaries, he announced a delay in the petrol supply until mid-July due to settling issues, with a target of hitting the market by the third week of July.
However, the July timeline could not be met as a fire incident at the refinery’s effluent treatment plant on June 26 impacted the petrol supply, leading to expectations for a release between August 12 and 15.
Petroleum marketers in Nigeria are eagerly awaiting updates from the refinery regarding the commencement of petrol release to the market, anticipating a switch from their traditional reliance on the Nigerian National Petroleum Company Limited for petrol.
The Major Energies Marketers Association of Nigeria’s Executive Secretary, Clement Isong, mentioned that major marketers are waiting for communication from the Dangote Group to kickstart petrol sales.
The crisis regarding crude supply at the Dangote Group has been linked to alleged frustrations by International Oil Companies, who are said to be hindering direct crude oil supplies to the refinery.
The group claimed that IOCs were insisting on selling crude oil through foreign agents at a premium above the officially regulated local price, adding that foreign producers prioritize Asian markets over Nigerian buyers.
Addressing the ongoing challenges, oil marketers have called upon the NNPC and IOCs to expedite the local crude supply process to domestic refineries, emphasizing the significant positive impact on the local currency and economy.
These efforts, if executed promptly, are believed to alleviate pressures on the foreign exchange market and support currency appreciation, consequently benefiting the Nigerian economy.