No love lost between NNPCL, Dangote Refinery over petrol 

• On DAY1 of fuel lifting, both firms bicker over price, supply capacity

Business a.m. Reporter

The no love lost relationship between state-owned oil company, Nigerian National Petroleum Company Limited (NNPCL), and Africa’s new kid on the block refining giant, Dangote Refinery and Petrochemical Limited, has now boiled over from crude supply issues to new disagreements over the final product, petrol or premium motor spirit (PMS) as the commodity is popularly called in some quarters in Nigeria.

NNPCL held what many likened to a stake-out or even a siege to the refinery on Saturday and Sunday in order to load the first official PMS to be commercially supplied to the market by the world’s largest single train refinery in the Ibeju Lekki area of Lagos State, where the refinery has been built on land Aliko Dangote, Africa’s richest man, said he paid the Lagos State government at least $100 million to secure its ownership.

The story of the refinery getting this far has not been a smooth one. Africa’s richest man, Dangote, the resolute single-minded industrialist and promoter of the refinery had been rattled by the establishment just weeks to the expected commencement of product roll-out from the refinery. 

With the installation of equipment and building of the refinery done, the billionaire was sorely tested by establishment insiders at both the regulatory arm and the NNPCL and, also in the market, by international oil companies (IOCs), when he had to cry out that IOCs were refusing to sell him feedstock (crude oil) that would enable his refinery produce.

It would later emerge that Dangote had been relying on an aspect of the Petroleum Industry Act which contains an obligation to supply crude to local refineries by crude oil producers such as the IOCs. Even the regulatory body had been unfriendly when its headship said the refinery had not been granted full licence to produce, and that in the matter of its diesel that it was inferior to others, especially those imported into the country — NNPCL has a near-monopoly on import.

But on Saturday and Sunday a new fault line was opened when NNPCL, said to have deployed 300 trucks to lift fuel from the refinery, disclosed that it had bought the fuel at N898 per litre, and that the refinery could not meet up with its agreed 25 million litres daily supply that had been agreed on. It opened a floodgate of statements from the two organisations.

Olufemi Soneye, spokesperson for the Nigerian National Petroleum Company Limited (NNPCL) had gone public to disclose that it bought petrol from Dangote Refinery at N898 per litre and forced the Dangote Group to issue a rebuttal.

In its response, Dangote Group issued a statement on Sunday evening through Anthony Chiejina, its chief branding and communications officer, who labelled the claim as “misleading and mischievous”.

Chiejina stated that the allegations were a deliberate attempt to undermine the company’s recent strides in addressing the country’s long-standing energy crisis, especially in light of its groundbreaking investment in the Dangote Refinery.

NNPCL’s Soneye’s disclosure had led to widespread reporting of an alleged transaction involving the state-owned oil company buying fuel from Dangote at N898 per litre.

But Chiejina denounced the claim as a calculated attempt to undermine the progress made by Dangote in resolving Nigeria’s chronic energy challenges, which have persisted for decades and plagued the country’s economic development.

“Our attention has been drawn to a statement attributed to NNPCL spokesperson, Mr Olufemi Soneye, that we sell our PMS at N898 per litre to the NNPCL.

“This statement is both misleading and mischievous, deliberately aimed at undermining the milestone achievement recorded today, September 15, 2024, towards addressing energy insufficiency and insecurity, which has bedevilled the economy in the past 50 years.

“We urge Nigerians to disregard this malicious statement and await a formal announcement on the pricing, by the Technical Sub-Committee on Naira-based crude sales to local refineries, appointed by His Excellency, President Bola Ahmed Tinubu GCFR, which will commence on October 1, 2024, bearing in mind that our current stock of crude was procured in dollars,” Dangote Group stated.

In the final remarks of the statement, Chiejina reiterated Dangote’s commitment to providing Nigerians with high-quality petroleum products, expressing confidence that the recent steps taken by the group will help put an end to the chronic fuel scarcity that has been a long-standing issue in the country.

Prior to Dangote Group’s denial of the purported fuel sale to NNPC, Olufemi Soneye, the chief corporate communications officer of NNPC, had on Saturday, September 14, announced the arrival of approximately 300 trucks at the Dangote Refinery in preparation for the loading of petrol.

Soneye wrote: “NNPC Ltd. trucks are arriving at the Dangote Refinery in preparation for the scheduled petrol loading on Sunday, September 15, 2024.

“For this initial loading, the price from the refinery was N898 per litre. I can also confirm, in response to your inquiries, that we will receive 16.8 million litres.

“As of 4 pm Sunday, we have loaded about 70 trucks today and it’s still ongoing,” he said.

And in a further riposte to Dangote’s rebuttal, NNPCL challenged Dangote Refinery to come out clean over the issue of  fuel price, stating that it has evidence to prove its claim that it got 16.8 million litres of and at N898.

“If it’s not ₦898, then what is the price? Let them inform Nigerians of the actual cost. We have issued Letters of Credit for the product, and there’s an invoice. Let them disclose the price,” Soneye said.

“We successfully loaded PMS at the Dangote Refinery today. The claim that we purchased it at N1,300 per litre or at N760 is incorrect.

“For this initial loading, the price from the refinery was N898 per litre. I can also confirm, in response to your inquiries, that we will receive 16.8 million litres.

“As of 4 pm Sunday, we have loaded about 70 trucks today and it’s still ongoing,” he said.

The NNPCL loaded the first batch of petrol from the Dangote Refinery on Sunday.

But apart from the price issue, the question about the refinery’s inability to produce and supply the quantity demanded by NNPCL on the first loading day has caught the attention of the public. 

The world’s biggest single train refinery with capacity to refine 650,000 barrels per day, according to NNPCL delivered only 16.8 million litres of the 25 million that per day that was expected. This means that supply was short by as much as 8.7 million litres on Day 1.

NNPCL sources said the organisation had gone to Dangote with expectation that its demand would be met in full but had been shocked when officials of the Dangote Refinery said it would not be able to deliver all of the 25 million litres.

This has now raised additional concerns especially as to whether or not it has the ability to sustain delivery of the exact quantity of the product especially on the second and third days of the PMS upload.

Analysts fear this could further negatively impact the scarcity of fuel with its supply still precarious and fuel queues still seen in fuel stations across the country.