The Nigerian National Petroleum Company Limited (NNPC) has announced it is ending its exclusive purchase agreement with Dangote Refinery, opening up the market for other marketers to buy petrol directly from the refinery
This means that marketers can now directly negotiate prices with Dangote Refinery and that NNPC would no longer be the only off-taker.
His development is in line with the regulations that are now in place for fully deregulated products, which allow refineries to sell directly to marketers on the basis of interested buyers and sellers.
Vice president of Dangote Industries Limited Devakumar Edwin said earlier in September that the refinery’s 650,000 barrels per day of petroleum processing had begun.
However, the NNPC denied being the only company to purchase all of the products from the Dangote Refinery in response to a claim that the corporation’s actions at the time were undermining the Dangote Refinery Limited.
In response to a complaint that the business’s actions at the time were harming the Dangote Refinery Limited, the NNPC, however, refuted being the sole company to buy every product from the Dangote Refinery. It said that any marketer might buy petrol directly from the refinery.
The NNPC explained that the Dangote Refinery and any other domestic refinery were free to sell directly to any marketer on a willing buyer, willing seller basis, just as is now the case for other fully deregulated products, including diesel, aviation fuel, and kerosene.
Independent marketers were not allowed to take the product from the refinery, even though certain major petroleum marketers were finally permitted to do so under an arrangement with NNPC Ltd.
He noted that competition is essential for reducing costs, adding that some marketers may resort to importing products to survive in the market.
NNPCL and the major marketers being the exclusive off-takers spells monopoly, which is tantamount to greed. This is the same NNPC Ltd that has failed to manage our crude and refineries for decades,” the lawmaker said at the time.
Those familiar with the matter said that NNPC is now set to withdraw as the sole off-taker to allow other marketers to directly purchase petrol from Dangote Refinery at the prevailing market price, promoting competition and potentially stabilising supply chains.
Femi Soneye, the spokesperson for the NNPC is not immediately available to comment for this story but a top official of the company confirmed the development
Independent marketers were not allowed to move the product from the refinery, even though certain large petroleum marketers were eventually allowed to do so under an agreement with NNPC Ltd.
The House of Representatives requested on September 26 that the federal government compel NNPC Ltd. and Dangote Refinery to let independent marketers to purchase petroleum straight from the refinery.
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In order to facilitate public access to petroleum products, the lower house also asked the management of Dangote Refinery to construct, purchase, or collaborate with others to develop tank farms or depots throughout the nation’s geopolitical zones.
Oboku Oforji (PDP, Bayelsa) submitted a motion of urgent public interest on Thursday, which was followed by the appeal.
Mr. Oforji, who made the motion, stated that competition had been hurt by the exclusion of independent marketers.