NNPC DIRECTS MARKETERS TO STOP PETROL IMPORTS, CITES DANGOTE REFINERY CAPACITY

NNPC DIRECTS MARKETERS TO STOP PETROL IMPORTS, CITIES DANGOTE REFINERY CAPACITY

The Nigerian National Petroleum Company Limited (NNPC) has issued a directive to oil marketers to cease the importation of petrol, asserting that the Dangote Refinery possesses sufficient capacity to meet domestic demand.

BusinessDay’s findings showed this directive emerged during a high-level meeting in Abuja, attended by NNPC Group CEO Mele Kyari, representatives of the Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and key stakeholders from companies such as 11 Plc, Matrix, AA Rano, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) among other stakeholders.

According to sources privy to the discussions, the NNPC unequivocally read the “riot act,” informing stakeholders that all petrol supply would now hinge on clearance from the Dangote Refinery.

An official in attendance disclosed, “NNPC emphasised that going forward, no marketer would be permitted to import petrol without specific clearance tied to Dangote’s capacity”.

The decision, while strategic, has sparked unease among oil marketers. Stakeholders raised concerns about Dangote Refinery’s ability to reliably supply the market and maintain consistent distribution across Nigeria’s expansive network.

Despite its capacity, marketers questioned whether the refinery’s production and logistical systems were adequately prepared to handle the country’s fluctuating demand.

Another contentious issue discussed at the meeting was the payment structure proposed by Dangote Refinery. Unlike the traditional importation system, where marketers settle payments upon product arrival at depots, Dangote insists on advance payment from marketers. This shift has raised concerns about cash flow and operational feasibility for smaller players in the downstream sector.

A stakeholder highlighted, “Paying upfront significantly increases financial pressure on marketers, particularly those with limited capital. For decades, we’ve operated on a post-delivery payment model, which aligns better with our liquidity cycles.”

Since starting operations in January, Dangote has sold its diesel, jet fuel and other products on the global market, mostly via traders Vitol and Trafigura and international energy company BP, according to S&P Global Commodities at Sea data.

Initially, it agreed an exclusive supply agreement with NNPC for its gasoline, but by Nov. 4 had also begun selling to local marketers, the refinery executive said.

The refinery has reported that its gasoline meets quality standards with a sulfur content of below 10 ppm, marking a significant improvement for the Nigerian market, for which 500 ppm was still the standard in late 2023.

“There is a price differential between Dangote’s premium petrol of 10ppm and imported petrol of 50 ppm,” another source said.

On Oct. 29, refinery CEO Aliko Dangote complained that the refinery was wasting money holding over 500 million liters (around 3.1 million barrels) of fuel in storage, while the company has blamed illicit low-quality imports for undercutting its prices and threatened to sue state oil company NNPC for continuing its fuel imports.

Documents seen by BusinessDay during 42 days from October 1 to November 11, 2024 showed the NNPC and its partners imported 1.5 million metric tonnes of PMS, 414,018.764 metric tonnes of diesel, and 13,500 metric tonnes of jet fuel. This is worth about N3 trillion or $1.8bn.

“There is a big question mark on where the marketers are sourcing their dollars from to import petrol,” a senior oil executive said.

A document that provided details of imported refined products during the review period showed that companies like Bovas, AA Rano, Matrix, Fatgbems, Deepwater, Raj, T-Time, Rainoil, Prudent, Chisco, Nepal, AYM Shafa, Northwest, Shorelink, and others received petrol from different vessels in Lagos, Warri, Calabar, and Port Harcourt.

Petrol importation saga

Speaking on November 12 at the 42nd Nigerian Association of Petroleum Explorationists (NAPE) annual international conference in Lagos, Mele Kyari, NNPC’s group chief executive officer (GCEO), said the national oil company has stopped importing fuel.

Kyari said the company is now off-taking products from the Dangote refinery and other local refineries.

“Today, NNPC does not import any product, we are taking only from domestic refineries,” he had said.

But in a statement on Friday, the national oil firm said Kyari was misquoted.

“The GCEO’s statement, ‘Today, NNPC does not import any product; we are only taking from domestic refineries’, was taken out of context,” the statement reads.

“It should not be construed to imply that NNPC Ltd. is obligated to be the sole off-taker of any refinery or that we will no longer import fuel.

“While NNPC prioritises sourcing products from domestic refineries, this is contingent upon economic viability. If local supply is cost-effective, it will be preferred, but the same principle applies to other marketers, who will also evaluate total costs when deciding whether to buy locally or import.”

  • Dons Eze

    DONS EZE, PhD, Political Philosopher and Journalist of over four decades standing, worked in several newspaper houses across the country, and rose to the positions of Editor and General Manager. A UNESCO Fellow in Journalism, Dr. Dons Eze, a prolific writer and author of many books, attended several courses on Journalism and Communication in both Nigeria and overseas, including a Postgraduate Course on Journalism at Warsaw, Poland; Strategic Communication and Practical Communication Approach at RIPA International, London, the United Kingdom, among others.

    Related Posts

    CBN INCREASES ATM TRANSACTION FEES, BANKS BEGIN IMPLEMENTATION MARCH 1

    CBN INCREASES ATM TRANSACTION FEES BANKS BEGIN IMPLEMENTATION MARCH 1 The Central Bank of Nigeria (CBN) has announced a review on the transaction fees for automated teller machines (ATMs) In a circular signed by John Onojah, acting director of financial policy and regulation department, the CBN said the revised charges will take effect from March 1. The regulator said the move would address rising operational costs and enhance efficiency in the banking sector. The last time ATM transactions charges were reviewed was in 2019, when the CBN reduced the withdrawal fees from N65 to N35. While the latest increase means Nigerians will pay more for ATM transactions, the apex bank said the review is in line with Section 10.7 of the ‘CBN guide to charges by banks, other financial and non-bank financial institutions (2020)’. “In response to rising costs and the need to improve efficiency of Automated Teller Machine (ATM) services in the banking industry, the Central Bank of Nigeria (CBN) has reviewed the ATM transaction fees prescribed in Section 10.7 of the extant CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions, 2020. (the Guide),” CBN said. “This review is expected to accelerate the deployment of ATMs and ensure that appropriate charges are applied by financial institutions to consumers of the service. “Accordingly, banks and other financial institutions are advised to apply the following fees with effect from March 1, 2025.” According to the new policy, customers withdrawing from their bank’s ATMs (on-us transactions) will continue to enjoy free withdrawals. However, a N100 fee per N20,000 withdrawal will be applied at on-site ATMs (those located at bank branches). For withdrawals at ATMs of other banks (Not-on-Us transactions), an off-site withdrawal will attract a N100 fee plus a surcharge of up to N450 per N20,000 withdrawal. The CBN clarified that the surcharge is the income of the “ATM deployer/acquirer and must be disclosed to consumers at the point of withdrawal”. For international withdrawals using debit or credit cards, the CBN said banks and financial institutions are now permitted to apply “a cost-recovery charge equivalent to the exact amount charged by the international acquirer”. “Furthermore, the three free monthly withdrawals allowed for Remote-On-Us (other bank’s customers/Not-On-Us consumers) in Nigeria under Section 10.6.2 of the Guide shall no longer apply,” CBN added. The apex bank urged all financial institutions to comply with the new directives ahead of the implementation date.

    SUSPEND TELECOM TARIFF HIKE – HOUSE OF REPS DIRECTS NCC, MINISTER

    SUSPEND TELECOM TARIFF HIKE – HOUSE OF REPS DIRECTS NCC, MINISTER The House of Representatives Tuesday directed the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani and the Nigerian Communications Commissions, NCC, to suspend the impending hike in telecommunications tariffs until services are improved. The decision of the House was sequel to the adoption of a motion of urgent public importance moved at the plenary on Tuesday by Oforji Oboku. Presenting the motion, the lawmaker recalled that speaking after a stakeholders’ meeting with Mobile Network Operators in Abuja on Wednesday 8th of January, 2025, Tijani disclosed that telecommunication tariffs would soon increase. The lawmaker stressed that the argument of the telecommunications companies for the hike includes, the cost of investment, better networks, increasing demand for digital services across sectors such as education, banking and healthcare, amongst others. Oboku recalled that telecommunications companies had been advocating for the hike for the last 11 years, according to the Association of Licensed Telecom Operators of Nigeria, ALTON, and the Association of Telecommunication Companies of Nigeria, ATCON. The lawmaker noted that the National Association of Telecoms Subscribers has rejected the proposed increase in tariffs, describing it as insensitive and a further burden on consumers already grappling with economic hardship, and poor network service delivery. He explained that the telcos need cost- reflective tariffs in the face of adverse economic realities like a record inflation of 34.6 percent in November 2024 and losses resulting from foreign exchange fluctuations. “It is imperative that the telecommunications companies improve on their service delivery (poor network), which Nigerians have been yearning for in years, before embarking on the increase in their tariffs.” The lawmaker expressed concern that the far reaching effects of these price hikes would deepen financial struggles for the average Nigerian, threaten the country’s vision of leveraging technology to drive economic revival, exacerbate poverty and widen existing inequalities, hitting lower income families the hardest. Oboku argued that affordable connectivity is a must for progress in critical sectors like digital banking, education, healthcare, agriculture and e- governance. After a debate, the House resolved: “To urge the Minister of Communications, Innovation and Digital Economy and the Nigerian Communications Commissions to suspend the impending hike in telecommunications tariffs until their service improved.”

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    SHARIA: YORUBA MUSLIMS NOT YOUR SLAVES – AKINTOYE TELLS SULTAN

    • By Dons Eze
    • February 12, 2025
    • 10 views

    ENUGU LP HOUSE OF REPS MEMBERS JOIN APC

    • By Dons Eze
    • February 12, 2025
    • 38 views

    CAMBRIDGE HONOURS NIGERIAN PHD STUDENT FOR BIAFRA HERITAGE PROJECT

    • By Dons Eze
    • February 12, 2025
    • 18 views

    NORTHERN EMIR BANS CHURCH ACTIVITIES IN CHRISTIAN FAMILIES

    • By Dons Eze
    • February 12, 2025
    • 52 views

    TOO MANY PEOPLE COME TO UK TO WORK ILLEGALLY – PRIME MINISTER VOWS TO END IT

    • By Dons Eze
    • February 12, 2025
    • 35 views

    TENSIONS RISE BETWEEN ANAMBRA, IMO OVER KILLING OF TWO RESIDENTS BY SOLUDO’S AGUNECHEMBA