Abuja, Nigeria – November 12, 2024 In a major shift for Nigeria’s energy sector, the Nigerian National Petroleum Company Limited (NNPCL) has announced that it has ceased all fuel importation, transitioning to sourcing from local refineries, including the newly operational Dangote Refinery. This development marks a significant milestone in Nigeria’s drive for energy self-sufficiency, reducing dependence on imported refined petroleum products.
At a press briefing on Tuesday, NNPCL’s Group Managing Director (GMD), Mr. Mele Kyari, expressed the company’s commitment to supporting domestic refineries and emphasized the strategic importance of the new partnership with the Dangote Refinery. “Today, NNPC does not import any product; we are taking only from domestic refineries,” Kyari stated, noting the value of strengthening local refining capacity.
The Group Chief Executive Officer, Mele Kyari elaborated on NNPCL’s investment in the Dangote Refinery, affirming the mutual benefits of this collaboration. “We are very proud part-owners of Dangote refinery, no doubt about it. We saw an opportunity that there is a clear market for at least 300,000 barrels of our production,” Kyari explained. “We know that as time moves on, people will start struggling to find markets for their production. It will happen; it’s already happening.”
The GMD highlighted that this shift from international suppliers to local sources was a deliberate business decision, made with an eye on long-term supply security and economic stability. “Oil is found, as you know, in many unexpected locations across the world, and people have choices. Therefore, we saw an opportunity to log supply to the domestic refinery—not just Dangote but any other refinery that operates in the country,” he added.
The Dangote Refinery, with a production capacity of 650,000 barrels per day, is expected to play a pivotal role in stabilizing Nigeria’s fuel market and reducing the reliance on imported fuel, which has historically put pressure on the country’s foreign reserves. The refinery’s output aligns with NNPCL’s strategy to prioritize local consumption and secure a steady, more sustainable fuel supply chain.
A New Era of Energy Security The NNPCL’s decision marks a turning point for the Nigerian energy sector. By reducing fuel imports, the company aims to enhance fuel availability nationwide, stabilize prices, and cut down on the high costs and logistical challenges associated with fuel importation. The move aligns with Nigeria’s broader economic policies aimed at boosting local industries and reducing outflows of foreign exchange.
The Road Ahead This development, seen as a forward-thinking strategy for Nigeria’s petroleum sector, sets the stage for further investment in domestic refining capabilities. With the Dangote Refinery and other local refineries now playing a central role, the Nigerian fuel market is poised for a new phase characterized by greater energy independence and economic resilience.
Vitol Group, Trafigura Group and BP Plc are the dominant buyers of fuels from Nigeria’s giant new Dangote oil refinery near Lagos that’s reshaping petroleum trading in Africa and Europe.
The trio have accounted for the vast majority of the plant’s shipments since flows began ratcheting up around the middle of this year, according to data from Precise Intelligence, a new oil-and-gas trading analytics firm based in Geneva.
Once it’s fully up and running, Dangote should be able to process about 650,000 barrels a day of crude into products including gasoline and diesel. That will far exceed the fuelmaking capacity of any single plant in Europe or Africa, helping to reshape the regions’ oil and fuel trading. The emergence of Dangote has already trimmed a glut of Nigerian crude.
Since starting up, the refinery has loaded almost 6 million tons of fuel, Precise’s data show. That’s equivalent to almost 45 million barrels. Loading rates averaged about 35,000 tons a day in October, its data show.
Dangote itself said late last month that the refinery had reached processing rates of about 420,000 barrels a day of crude. The plant is also selling into the Nigerian market.
Vitol and Trafigura declined to comment. Dangote and BP didn’t respond to requests to comment.
The composition of fuel cargoes loading from Dangote is closely watched because it offers clues into where the refinery is at in terms of starting up different processing units.
Precise’s figures show that automotive gasoil — diesel — is the biggest cargo type being lifted, followed by fuel oil. Together, they account for more than 60 percent of what’s being collected from the plant. Other fuels include gasoline and jet fuel.
The Nigerian National Petroleum Company Limited (NNPCL) finds itself grappling with a complex situation: on one hand, there is the unfinished business of reviving government-owned refineries, most notably the Port Harcourt Refinery, which has seen countless delays; on the other, NNPCL is becoming increasingly involved as an intermediary between the newly operational Dangote Refinery and independent marketers. This dual focus reveals an underlying tension within Nigeria’s oil sector—a tension that has broad implications for energy security, pricing stability, and economic resilience.
The Long-Awaited Revival of Government-Owned Refineries
One of the most pressing challenges NNPCL faces is the continuous postponement of getting the government-owned refineries—specifically, the Port Harcourt Refinery—back to operational status. These refineries, once the pride of Nigeria’s domestic fuel production, have for years failed to produce any significant output due to mismanagement, lack of maintenance, and underinvestment. The Port Harcourt Refinery’s rehabilitation, originally projected to be completed years ago, has become a symbol of unfulfilled promises. Despite repeated reassurances, each announced operational date has ended in another delay.
These continuous postponements have frustrated both industry players and the general public. The expectation was that the refurbishment of the government-owned refineries would reduce Nigeria’s dependence on imported refined products and help stabilize the supply of Premium Motor Spirit (PMS). Yet, every new missed deadline only emphasizes NNPCL’s struggle to bring this vision to life. The prolonged delays mean that Nigeria continues to depend heavily on imported petrol, draining valuable foreign exchange reserves and subjecting the domestic market to international price volatility.
NNPCL’s inability to meet its refinery deadlines has broader implications for Nigeria’s energy landscape. The delays perpetuate an expensive reliance on imports, making Nigeria vulnerable to fluctuations in global oil markets and depriving the country of the opportunity to establish true energy independence. This situation directly impacts fuel prices across the nation, often resulting in high costs at the pump that ripple through other sectors of the economy, driving up the cost of goods and transportation.
Stepping in as the Intermediary Between Dangote and Independent Marketers
While the government refineries remain stuck in limbo, NNPCL has increasingly stepped in to play a different role—acting as an intermediary between Dangote Refinery, Africa’s largest private refinery, and the nation’s independent petroleum marketers. This new role comes with its own set of opportunities and challenges, signaling a pivot in NNPCL’s strategy amidst the delayed progress on their own refineries.
With Dangote Refinery now operational and producing petrol, NNPCL initially positioned itself as the sole buyer of PMS from the refinery, ostensibly to ensure a stable and streamlined supply chain. However, recent reports suggest that NNPCL is reconsidering this exclusive role. Instead of acting as the single point of purchase and distributor, NNPCL may opt to share responsibility with independent marketers, creating a more open, albeit complex, market dynamic.
This move raises several questions. Is NNPCL stepping away from its primary mandate to prioritize the rehabilitation and operation of the nation’s own refineries? By focusing on acting as a middleman between Dangote Refinery and independent marketers, NNPCL may be indirectly admitting its inability to swiftly restore the government-owned refineries. This evolving role, while seemingly practical in light of current fuel demands, also indicates a strategic shift from being a production-centric entity to more of a logistics and supply-chain facilitator.
For independent marketers, having direct access to Dangote’s output could mean more competition and, ideally, better pricing. However, without NNPCL’s coordinating hand, the market could become prone to price wars and supply inconsistencies, ultimately harming the average consumer. This uncertainty puts additional pressure on NNPCL to manage relationships and market expectations carefully, even as it attempts to figure out its own production capacities.
Broader Implications for Nigeria’s Energy Sector
NNPCL’s current situation presents a paradox: it’s an organization with significant potential and ambition but is caught between two competing roles. On one hand, it aims to fulfill the national goal of restoring government refineries to operational status—a crucial step towards reducing reliance on fuel imports and gaining true energy independence. On the other hand, the company is leaning into its role as an intermediary, seemingly to cover gaps created by the ongoing failure to rehabilitate its refineries.
This dual focus dilutes NNPCL’s capacity to make meaningful progress on either front. The delays in refinery operations mean that Nigeria continues to lose out on potential value-added benefits from refining its crude oil domestically. Meanwhile, by inserting itself as a middleman between Dangote and independent marketers, NNPCL risks entrenching itself in a complex intermediary role instead of developing its own production facilities.
Moreover, these moves have critical implications for fuel pricing and availability across Nigeria. The reliance on a single private entity—Dangote Refinery—for refined products creates a potential monopoly scenario, where market dynamics are subject to the pricing strategies and production decisions of one company. If NNPCL is unable to fully rehabilitate its refineries, this concentration of power in a single private refinery could lead to unstable pricing and limited control for the government over critical energy supplies.
Conclusion: A Need for Focused Strategy and Decisive Action
NNPCL’s current dual role is emblematic of the broader challenges facing Nigeria’s oil and energy sectors. The continuous postponement of government-owned refineries, particularly the Port Harcourt facility, highlights a persistent inability to achieve energy independence despite immense national resources. At the same time, the evolving intermediary role between Dangote Refinery and independent marketers points to a stopgap solution rather than a long-term strategic approach.
To address these dual challenges effectively, NNPCL must prioritize and clarify its focus. The government refineries must either be brought online without further delays or realistic alternatives must be developed, including potential partnerships or divestitures that could make these refineries functional. On the other hand, if NNPCL decides to continue acting as a mediator in the petrol supply chain, it must ensure transparency, fair pricing, and a stable supply to benefit both marketers and consumers.
Ultimately, NNPCL’s ability to move beyond its current position of “two mouths”—speaking both about refinery rehabilitation and private partnerships—will determine its role in shaping Nigeria’s energy future. By adopting a focused, strategic, and action-oriented approach, NNPCL can finally fulfill its mandate of securing energy stability for Nigeria, thereby laying the foundation for long-term economic growth and national development.
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Festus Osifo is a renowned industry leader and philanthropist who has made significant contributions to the oil and gas sector in Nigeria. Born into a modest family, Osifo’s early years were marked by strong values and work ethic instilled by his parents . He excelled in his early education, demonstrating exceptional academic prowess, and later attended a prestigious university where he earned his degrees
Osifo’s professional journey began with challenging yet opportunities-filled job experiences that contributed to his growth and development . He quickly made a name for himself, taking on important projects and roles that showcased his skills and dedication. As the President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Osifo proclaimed a new dawn for the staff of the Association, emphasizing his commitment to their welfare
Throughout his career, Osifo has held several leadership positions, including serving as the President General of the Trade Union Congress of Nigeria (TUC) . He has been recognized for his contributions to the industry, receiving various awards and accolades . Osifo is also a member of the Nigeria Society of Engineers (NSE), Council of Registered Engineers of Nigeria (COREN), and Society for Petroleum Engineers (SPE) .
Key Achievements:
Leadership Roles: President of PENGASSAN and President General of TUC
Industry Contributions: Introduced innovative ideas and practices that transformed the oil and gas sector
Awards and Recognitions: Received various awards for his contributions to the industry
Philanthropy: Involved in charitable activities, using his resources and influence to make a positive impact
Osifo’s personal philosophy emphasizes integrity, hard work, and a commitment to excellence, guiding his actions and decisions . He believes in mentoring others, sharing his knowledge and experience to help them grow and succeed . With his vision for the future, Osifo aims to continue driving innovation and making meaningful contributions to the industry
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has clarified the reasons independent marketers are unable to purchase petrol directly from Dangote Refinery.
The association’s president, Festas Osifo, at a press conference in Lagos, on Tuesday, said the issue stems from a pricing disparity between the costs at which the Nigerian National Petroleum Company Limited (NNPCL) buys PMS and the prices it sells to independent marketers.
Osifo explained that NNPC may purchase PMS at approximately N950, but sell it to independent marketers at around N700, leading to a significant shortfall that NNPC manages.
He said major marketers would buy directly from Dangote at a price similar to NNPCL’s purchase but would need to sell it at a higher price, potentially over N1,000.
Independent marketers prefer to purchase from NNPCL to take advantage of the lower prices, he said.
Osifo noted that some crude oil has been tied to loan repayments, limiting the available supply for local consumption.
He cautioned that the ongoing trend of divestment by International Oil Companies (IOCs) poses both risks and opportunities for Nigeria, including potential reductions in foreign direct investment and production levels.
UYO – PREMIUM Motor Spirit (PMS) on Tuesday shot to N2500 per litre in Akwa Ibom state with consumers hardly able to get it as Independent Petroleum Marketers Association of Nigeria (IPMAN) engages in panic sales over lingering faceoff between the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Joint Task Force (JTF).
The situation has worsened transportation in the state with an increasing decline in the number of vehicles on the road and transporters raising fares by over 200 per cent as NUPENG stopped tankers from entering Akwa Ibom for the past few days.
Most filling stations run by independent marketers monitored in Uyo and environ were shut in response to the “Notice of Withdrawal of Services Over Confiscation of PMS – Loaded Trucks by JTF Personnel”, signed by the Chairman, Coordinating Committee, Francis Udoyen, and Secretary, Prince Ekom Idemudo.
They said it was imperative to call out their members in solidarity with NUPENG to demand the release of the PMS-loaded trucks seized from some members four months ago by men of the JTF, Operation Delta Safe (ODS).
“As part of our obligation to stand for each other in and off-season, equally drawing strength from the resolution taken at the last emergency congress over members’ trucks in the custody of the JTF operatives for four months now, you are hereby directed to close your filling stations from the public with effect from Tuesday, September 24, 2024.
“This action has the approval of our national office, and non-compliance will be visited with appropriate consequences”, the IPMAN directive read.
State Chairman, Natural Oil and Gas Association of Nigeria (NOGASA), Sam Osung, former Aide to Governor Umo Eno, blamed the state government for failing to wield the big stick against perceived excesses of NUPENG and IPMAN.
Osung accused the stakeholder groups of overreaching themselves in the state, arguing that if they felt offended by the JTF’s impounding of their fuel trucks, the lawful thing to do was to go to court to prove their case and not hold fuel consumers to ransom.
He narrated that, “Men of the ODS under the 2 Brigade, Nigeria Army, arrested two trucks of PMS and 44 drums of PMS from six filling stations at Ibaka, Mbo Local Government Area over four months ago. The filling stations were accused of involvement in petroleum products smuggling.”
“Officials of IPMAN addressed a press conference demanding the immediate release of the trucks. Subsequently, they shut down their filling stations and embarked on a protest in Oron LGA.
“The ODS decided that if the owners consider themselves innocent they should go to Court. We know that smuggling is an act of economic sabotage and an innocent marketer should have gone to Court to prove his innocence.
“The marketers are trying to bully the Army to release their trucks without proving their innocence. They have hired the Petroleum Tanker Drivers (PTDs), to stop products from entering Akwa Ibom since last Monday.
“The Army was informed and they want to rescue the impounded trucks and escorted the trucks to the owners while requesting the documents authorising them to stop tankers from entering any state.”
He added, “The government is aware of the excesses and no one is addressing this. The government should say something. The government should act as a government.
“They did it before with the allegation that I was their problem because I know what they know, and even know their rights based on their constitution. They ganged up and the governor fired me.
“That didn’t solve the problem. I wish the government was able to address the matter based on the right and privileges of everyone who was involved. Government was more interested in making me the scapegoat.
“The issue of the excesses of NUPENG wasn’t addressed, and today, they have illegally stopped tankers from entering Akwa Ibom for about a week and IPMAN has resumed panic sales with a hike in price.”
Filling stations owned by the Nigerian National Petroleum Company Limited (NNPC) have hiked the fuel price to over N850 per litre in the country.
SaharaReporters learnt that this move by the filling stations was in compliance with a directive given by the NNPC management compelling an immediate increment of fuel official price from N568 to N855.
Checks by SaharaReporters in Ilorin, Kwara State showed that the filling stations on Tuesday morning complied with the directive on the increment.
An NNPC station located at Adewole Area of Ilorin, the state capital is currently selling fuel at N877 per litre.
A picture of an NNPC station in Lagos which SaharaReporters saw indicated total compliance with the directive as the new price is pegged at N855 in the state.
A viral video on X showed how Nigerians are lamenting the new price.
“N855 at NNPC station in Ikoyi area (Lagos State),” a customer said in the video.
The Nigerian Government has distanced itself from the ongoing face-off between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery over petrol pricing, stating that it will not intervene in the dispute.
According to the Presidency, both NNPCL and Dangote Refinery are free to set their own pump prices for Premium Motor Spirit (PMS), otherwise known as petrol, as the petroleum market has been fully deregulated.
This is made known on Wednesday by President Bola Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, during a press briefing at the State House in Abuja.
Onanuga explained that the deregulated market allows oil refiners and marketers, including NNPCL and Dangote, to operate based on market dynamics without government interference.
He noted that the competition could eventually benefit Nigerian consumers by fostering competitive pricing, which might lead to a reduction in pump prices.
Onanuga said the government is committed to ensuring a free-market economy where consumers have choices. Both companies are now competing, and market forces will determine the price of petrol, he noted.
He said, “The PMS price regime has been deregulated. Dangote is a private company. NNPCL, you should not forget is a limited liability company.
“The dispute between the two is their own issue. According to the Petroleum Industry Act, NNPCL operates independently. Even though it’s owned by the Federal Government, the state government and local councils and everything, it is operating as a limited liability company.
“Private marketers have already expressed that NNPC and Dangote’s prices are too high for them, which may lead to them importing fuel.
“In the end, it’s the consumers who stand to benefit if a price war breaks out. If NNPC’s price is too high, the public market can bring in their own fuel and sell it at a more reasonable and profitable rate.”
“The government is not getting involved in this matter. Dangote operates his private company independently, and NNPC, as a limited liability company, has the authority to set its own prices,” Onanuga added.
