Dangote Refinery Breaks NNPC Monopoly as Oil Marketers Begin Direct Petrol Purchases

The Dangote Petroleum Refinery has commenced the direct supply of Premium Motor Spirit (PMS), commonly known as petrol, to oil marketers, bypassing the Nigerian National Petroleum Company Limited (NNPC). This move signals a significant shift in Nigeria’s oil supply chain, following the deregulation of the petroleum market.

As oil marketers ramp up efforts to source petrol directly from Dangote’s refinery, some are still relying on imports to meet demand. Industry reports confirm that hundreds of millions of litres of PMS are expected to arrive in Nigeria in the coming weeks. Just last weekend, four vessels carrying imported PMS berthed at seaports along Nigeria’s borders, adding over 123 million litres of fuel to the national supply.

The Dangote refinery, a $20 billion facility located in Lekki, began selling petrol in September. Initially, NNPC was positioned as the sole off-taker, a decision mandated by the Federal Government. However, the landscape shifted in mid-October when the Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency announced that oil marketers could now negotiate directly with the refinery, bypassing the state oil corporation entirely.

Speaking anonymously, a senior official at the Dangote Refinery confirmed that oil marketers had begun lifting petrol directly from the plant on a willing-buyer, willing-seller basis. “Marketers are already approaching us for direct transactions,” the official revealed, adding that the refinery’s competitive pricing had drawn substantial interest from the private sector. Trucks loaded with petrol for major marketers were seen leaving the refinery without any NNPC involvement.

The refinery is currently focused on producing PMS, which accounts for 53% of its total crude oil processing. This focus could shift if demand for other refined products increases, but for now, petrol remains the priority. The official noted that the facility’s operations were improving steadily, particularly since the Federal Government began supplying crude to the plant.

Industry insiders have praised the development as a win for market liberalisation. “This is a normal business transaction in a deregulated market,” a major oil marketer commented, dismissing rumours that the refinery’s deal with NNPC needed to be terminated before private buyers could engage directly with Dangote.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has also been in talks with Dangote Industries. Hammed Fashola, IPMAN’s Vice President, expressed optimism after a recent meeting with Devakumar Edwin, the Vice President of Dangote Industries. “We had a fruitful discussion, and we expect to start lifting products from the refinery soon,” Fashola said, though he acknowledged that the full off-take would commence once logistical and contractual details were finalised.

Despite the early success of these direct sales, the naira-for-crude committee has yet to announce the official price for PMS. The initial claim by NNPC that it bought petrol from Dangote at ₦898 per litre has been dismissed as “mischievous” by refinery officials, who are awaiting the committee’s final pricing decision.

As Nigeria’s oil market enters this new era of competition, the Dangote Refinery’s role could reshape the dynamics of supply and pricing, offering oil marketers the flexibility to navigate outside NNPC’s shadow and potentially bringing much-needed stability to the country’s fuel supply chain.