The Dangote Petroleum Refinery has commenced test-runs for petrol production, with full-scale operations expected to begin by mid-September. Oil marketers are keenly awaiting the price of Premium Motor Spirit (PMS) from the $20 billion plant.
According to a report by Reuters, the refinery is in the final stages of testing before it releases petrol to the market. However, the report, citing IIR Energy—a global market intelligence provider—suggests that the start date for full operations could be further extended.
Efforts to obtain comments from the refinery’s spokesperson, Anthony Chiejina, were unsuccessful at the time of reporting.
Both the Major Energies Marketers Association of Nigeria (MEMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) have indicated that they are still awaiting the refinery’s pricing for petrol.
Earlier reports revealed that the Federal Government had reached an agreement with Dangote Refinery to begin petrol production in September. The agreement is part of a broader initiative to sell crude oil to local refineries in naira, with sales set to start on October 1, 2024.
Finance Minister Wale Edun, during a recent meeting with the Implementation Committee in Abuja, confirmed that the first delivery of PMS from Dangote Refinery is expected in September. However, IPMAN’s National Operations Controller, Mustapha Zarma, noted that oil dealers are still in the dark about the cost per litre of petrol from the refinery.
Zarma expressed concerns that the current market conditions might make it challenging for marketers to purchase petrol from Dangote if the price is aligned with market realities. He emphasized that the pump price of PMS in Nigeria is currently lower than the actual market cost, a situation that might deter purchases unless there is government intervention or a change in pricing policy.
The Nigerian National Petroleum Company Limited (NNPC) recently highlighted that the pump price of petrol is far below the landing cost, with MEMAN estimating it at around N1,117 per litre. Zarma suggested that unless the government subsidizes the product or enters a special agreement with Dangote, the refinery may not be able to sell petrol at a competitive price.
Initially, Aliko Dangote, President of Dangote Group, had announced that the refinery would start producing petrol in June, aiming to end Nigeria’s dependence on imported fuel. However, the timeline was pushed to July, then August, and now September, as the refinery works to ensure that the product meets required specifications.
A MEMAN official explained that the test-run process involves extensive blending and testing to achieve the right product specifications before full-scale production begins. The refinery is taking its time to ensure the final product meets the stringent standards required for the Nigerian market.
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