NNPCL Terminates Purchase Agreement With Dangote Refinery
By: Ogulagha Vanguards
According to Premium Times, citing sources, the Nigerian National Petroleum Company Limited (NNPCL) is terminating its exclusive purchase deal with Dangote Refinery, opening the door for other petroleum marketers to acquire gasoline straight from the refinery.
This is occurring at the same time as the Nigerian government has made plans to sell crude oil to Dangote Refinery in naira, which should lower the price of petroleum products.
This important move marks a departure from NNPC’s previous position as the only off-taker of Dangote Refinery’s goods and is consistent with the way deregulated products are currently sold in the market, where refineries find interested buyers and sellers.
This announcement comes after vice president of Dangote Industries Limited Devakumar Edwin made a statement in September announcing that NNPC will be the sole buyer of products from Dangote Refinery, which had started processing gasoline. Since then, nevertheless, NNPC has made it clear that, in the deregulated system, the refinery might sell its goods to any marketer just like any other indigenous refinery. However, in mid-September, NNPC started loading gasoline from the refinery alone, cutting out independent traders.
As the controversy over this exclusive relationship grew, on September 26, a motion was introduced in the House of Representatives. The federal government should order NNPC and Dangote Refinery to permit independent marketers to obtain gasoline straight from the refinery, according to a motion made by Oboku Oforji (PDP, Bayelsa).
Oforji contended that the exclusion of independent marketers jeopardized the industry’s competition and issued a warning that such actions would push some marketers to import goods to maintain their competitiveness, further complicating the dynamics of Nigeria’s fuel supply.
