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NNPCL buys fuel from Dangote refinery

by Hafeestonova

The Nigerian National Petroleum Company Limited has stopped importing refined petroleum products and is now off-taking fuel from the Dangote Petroleum Refinery and other local refineries.

NNPC’s Group Chief Executive Officer, Mele Kyari, disclosed this on Monday at the ongoing conference of the Nigerian Association of Petroleum Explorationists, which was held in Lagos and themed ‘Resolving the Nigerian Energy Trilemma: Energy Security, Sustainable Growth and Affordability’.

This is coming at a time when some petroleum marketers insisted that they would import petroleum products and sell at a price lesser than that of the $20bn dollar refinery.

In August, President Bola Tinubu said the country spent an average of N2tn on fuel importation monthly.

According to Tinubu, the launch of compressed natural gas into the country would save the country “over N2tn a month used to import PMS and AGO and free up our resources for more investment in healthcare and gas education.”

The President’s statement means that the country spends about N24tn yearly to import petrol and diesel, excluding aviation fuel, kerosene, and gas.

Despite being an oil-producing country, Nigeria has for years imported its fuels due to a lack of local refineries.

Speaking at the NAPE Conference, Kyari disclosed that the NNPC, as of today, is not importing any fuel as it now buys from local refineries.

“Today, NNPC does not import any product, we are taking only from domestic refineries,” he revealed.

Recall that the NNPC was the sole off-taker of Dangote PMS until the Federal Government permitted other marketers to approach the refinery for direct lifting.

Kyari debunked the allegations that the NNPC was sabotaging the Dangote refinery.

Speaking on domestic refining, he said there were several media stunts around saying the NNPC was now a saboteur of domestic refining by not willing to support domestic refineries.

“The point is very far from it and I’m going to speak to it straight. 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; we know that as time moves on, people will start struggling to find markets for their production.

“It will happen, It’s already happening. 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, so it was a very informed business decision.

“Therefore, from day one, we knew that it is to our benefit to supply crude oil to the domestic refinery, so we don’t need to be persuaded; we don’t need anyone to talk to us, there is no need for any pressure from the streets for us to do this. We are already doing this,“ he clarified.

On the request that Nigeria needs to domesticate its oil, he posited that Nigerian crude is ’Lamborghini crude ‘, so the products would be pricey.

According to Kyari, the issue of high-quality fuel should be a relative thing, saying many refineries do not patronise Nigerian crude because of the price.

He revealed that some global traders buy the crude and blend it with dirtier fuel to save cost.

He said, “We should never forget that Nigerian crude is ’Lamborghini crude’, if we choose that every product that we have in this country must come from domestic production, then we must deal with pricing. Otherwise, out there in the global market, everybody buys Nigerian crude and blends it with dirtier crude to process, a lot of you will confirm this. So, no one takes Nigerian crude except one or two refineries that I know. Straight processing of Nigerian crude, nobody does this, because you do have a gap in value if you do this.

“Therefore, as a country, and I believe this strongly also, that we must process all the crude that we produce in the country to the optimum. You can do intermediate products and sell to the market, you are still adding value. You don’t have to sell gasoline that is coming from Nigerian production.

“You can do something different so you can process it domestically, but it’s going to be high quality. As we all know and it’s very clear in the media that we are selling high-quality products, that’s very true but you need not do this. You are driving a Keke-Napep and you want Lamborghini fuel, you do not need it. So, the quality issue is a relative thing, it’s by geography, by location, and we will do everything possible to make sure that we domesticate this. Today, NNPC does not import any product, we are taking only from domestic refineries. But I also know that we are working jointly with the government to make sure that we manage the issue around prices if we have to source all our supply from the domestic market. It will be an issue and we are already resolving it. I can confirm that substantial work has been done and this will no longer be an issue.”

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