Now that premium motor spirit (PMS) can easily gush out from the US$20billion Dangote refinery after an extremely long wait, there are still problems with marketers boycotting the product because they think it is not expensive enough. So hopefully, a deal that might be wrapped up by the coming week between the Nigerian National Petroleum Company (NNPC) Limited and Lagos free trade zone area Dangote plant will ease tensions.

The said deal involves enabling the NNPCL to supply crude oil needed for production in local currency and buying the derivatives in the same form. It is expected that doing this will help ease pressure on the limited dollar stock that would have been needed to buy crude.

Speaking about this world of possibilities on Thursday 12 September 2024 was the Vice President of Oil and Gas at Dangote Industries Limited, Mr Devakumar Edwin while also communicating stiff reactions by indigenous marketers towards the company’s PMS, also known as petrol which is widely available for sales.

Now we are still discussing with the government to give us the crude in naira, says Dangote Industries Limited Devakumar Edwin. The discussions have been going on. It has not yet been concluded. When we buy the crude from them in naira, they will take the products back from us in naira, that’s where we are.

The deliberation, which the Dangote executive referred to, has its origin tied to a Federal Executive Council decision around the end of July. Back then, Mr Aliko Dangote, the owner of the refining company had been alleging sabotage by faceless cabals who did not want his venture to succeed.

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In addition to this, there was seemingly reluctance by international oil companies (IOCs) who mine the crude to allocate supply to Mr Dangote’s plant. This was why the Council’s declaration that the NNPCL sells crude oil in Naira not just to the Dangote refinery, but to other local players too, was needed.

And so now, two months down the line, it seems the finalisation of the instruction is concluding the way Mr Edwin pictured it on the X space chat with Nairametrics. The NNPCL on its part has told us they will have a team of six to 10 people permanently stationed inside our refinery. They even told us we should give them office space because they are going to give the crude.

They are going to monitor the production and then they will buy it back in naira. So, this is where we are and we are waiting for the conclusion of the discussions. Hopefully, by next week, if it gets concluded, we can kick off.

When the Dangote Refinery announced that it was ready to start releasing PMS to markets, it was quickly reported that it would be the sole buyer. However, after this statement, the company through spokesperson, Olufemi Soneye on 7 September said that it would not buy fuel from the plant if it sells higher than the international market.

Despite all the conditions and counterclaims, a deal between the 650,000-barrel-per-day refinery with the NNPCL will likely proceed because Mr Aliko Dangote wills it based on the explanation Vice President of Oil and Gas at Dangote Industries Limited, Mr Devakumar Edwin gave on X.

When it came to petrol, we told the Presidency that if we were going to continue to import crude, our cost of production would be high and of course, our quality is very high. So, we will continue to export and manage the business. Then they sat with us and said, ‘Okay, we will try and give you crude allocation and you please produce and sell to us the products which you are producing out of the crude’. We said, yes.

Then they said, can you sell it in naira? We said, no, we are a free zone company. We will be normally selling in dollars. They said, no, the country is in acute scarcity of dollars. So, please, we will supply the crude to you in naira. Sell the product to us in naira. Though internally, including me, some of us objected to the idea. My president (Aliko Dangote) clearly said we are going to accept this because the country is badly in need of foreign exchange.

Going through with the NNPCL proposal would mean a loss for Mr Dangote but he is willing to stomach it for the good of all Nigerians. By the time he converts the Naira equivalent of his petroleum product sale to dollars, it won’t be the same value but he is willing to take the loss in the interest of the country.

Mr Edwin, further quoting Dangote, said: Somebody has to take certain risks. I’m willing to face the loss to whatever extent it is.

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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.