Even with N3.3trillion net profit recorded last year, the Nigerian National Petroleum Company (NNPC) Limited finds itself unable to perform the role of being the country’s sole importer of petrol seeing persistent filling station queues that had been building up since July.

Starting the new month of September, there will be a positive change of fortunes based on a deal to get all of NNPCL’s supply from the 650,000 barrel-per-day Dangote Oil Refinery which has only just clocked 15 months of existence.

The national oil company had some owning up to do that explains the drought of petrol for up to 12 weeks.

PRESS RELEASE

NNPC Ltd Faces Financial Strain Due to PMS Supply Costs, Impacting Supply Sustainability

NNPC Ltd. has acknowledged recent reports in national newspapers regarding the company's significant debt to petrol suppliers. This financial strain has placed considerable… pic.twitter.com/HR1FP1gGzy

— NNPC Limited (@nnpclimited) September 1, 2024

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NNPCL said through a press release on Sunday that reports surrounding $6b debt to foreign suppliers were true but still, it was dedicated to sticking to the foundation of the Petroleum Industry Act of 2021 which makes it the supplier of last resort leading to what ultimately is cheery news by a Dangote Industries Limited executive Devakumar Edwin.

We are testing the product (gasoline) and subsequently, it will start flowing into the product tanks, says the vice president at the firm when chatting to the Reuters news agency. Although the outlet couldn’t confirm a date for when petrol will be to the consumers, in Nigeria, the NNPCL will be the only client getting supplies.

And so with petrol paid for with Naira now in the hands of NNPCL, next will be to offload the product to local oil marketers at a price yet to be imagined. The landing cost of Premium Motor Spirit, also known as petrol, marketers say, was N1,117 per litre on Tuesday, July 16, 2024. At this time, it was still the early weeks of the current scarcity that has seen transport costs skyrocket although it is nothing new.

The NNPCL getting Dangote’s PMS supply exclusively is just one road path, if not the latter will export its produce to the demand outside Nigeria. Mr Edwin had told Reuters that if no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel.

Naturally, retail buyers want to be able to enjoy the benefit of having the largest single-train refinery in the world stationed in their country but analysts know that the plant will be out to make returns from its investment the way it is to be expected of private companies.

Regardless, the Dangote refinery has shown that it is willing to look beyond the dictates of production cost so that overly-burdened households and businesses can slightly breathe. It happened with automotive gas oil otherwise called diesel and JetA fuel for planes.

With diesel saw a reduction in price within a very short time of the refinery starting production. In April, the refinery sold diesel to marketers at the unit cost of N940 for those buying five million litres or above. When petrol hits NNPCL’s storage, the buyers will have expectations.

All eyes will be on NNPCL and its chief executive officer Mr Mele Kyari in particular. Maybe before the anticipated televised hearing, the dust from the country’s fuel inadequacies would have cleared. For the time being, it looks like a 50-50 chance that this will happen.

ALSO READ: Diesel from the Dangote refinery crashes the price of fuel to below ₦1,250 per litre

Ayodele Johnson

Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.