The Federal Government and Dangote Refinery agree on Petrol Sales, and the new development has a calming alleviating impact on the troubled nation. The agreement comes into effect on the 1st of October,2024.
Federal Government inaugurated committee has reached an agreement with Dangote Petroleum Refinery to supply crude oil to local refineries.
It is understood that the committee was set up to oversee the implementation and sale of crude oil to local refineries in Nigeria which is expected to commence next month, September 2024.
On Monday, 19th August 2024, one of the committee members in the person of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed that the supply and sale of crude oil products to the Dangote Refinery and all other local refineries will commence in October 2024.
As disclosed on the Ministry of Finance’s verified page on Social Media, the meeting held on Monday in Abuja was to look into the advancement and growth of key initiatives.
The meeting was also set up to assess key roles of stakeholders, such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Upstream Petroleum Commission and the African Export-Import Bank, to ascertain smooth operation, planning and implementation.
According to the post, “The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, today led the Implementation Committee meeting on the transition to crude oil sales in naira. Federal Government, Dangote Agree On Petrol Sale
“The meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024.”
Also, Zacch Adedeji, the Executive Chairman of the Federal Inland Revenue Service and the Chairman of the Technical Sub-Committee disclosed that “The first PMS delivery from Dangote is expected next month under existing agreements.”
Updates were also given on Port Harcourt and Dangote Refineries which are expected to improve on production output from November this year.
Wale Edun stressed that the operation of the committee must be transparent and also tasked the Technical Sub-Committee to be proactive so that reports from their operations would be made available to the President on time, noting the decisions must be made come September.
It should be remembered that, on 29th July 2024, the Federal Executive Council assented to the President’s decision to stop NNPC from selling and supplying crude oil to local refineries in Foreign currencies.
The directive came that about 450,000 barrels meant for local use should be sold in Naira to Local refineries.
This policy was to ensure the steady price of refined petroleum products and exchange rates between the Dollar and Naira.
Monday’s meeting was the second in seven days held to look into the issue.
Research has revealed that THE Dangote Refinery will need 15 cargoes of crude oil every year to sustain its operational capability.
However, various sources have disclosed that local refineries are yet to buy crude oil in Naira. Federal Government, Dangote Agree On Petrol Sale
On the other hand, the Arewa Consultative Forum has echoed its support for Dangote Petroleum Refinery amidst ongoing tussle and controversies surrounding the facility.
National Publicity Secretary, Dangote Refinery Photo Credit – Dangote Refinery
According to its National Publicity Secretary, Prof Tukur Muhammad-Baba, in Kaduna on Monday, the ACF stated their worry over the negative narratives and controversies surrounding the Dangote Refinery, a ‘source of national pride’ as it was described by them.
“The ACF delegation, which visited the facility on July 30, 2024, was impressed by its sophisticated quality testing and control laboratories, which meet and surpass global industry standards,” it said.
The group went further by praising Aliko Dangote, the initiator and promoter of DPRPI, as a courageous, visionary, and patriotic entrepreneur worthy of commendation and support.
Federal Government And Dangote Refinery Agree On Petrol Sales
Related News: NNPC Sell Petrol At Half Cost
The Nigerian National Petroleum Company (NNPC) Ltd has revealed that it sells petrol on its half landing cost, but not subsidy.
This revelation was made on Monday in Abuja by the Company’s Chief Financial Officer, Umar Aliyu. During a media chat with NAN, Aliyu disclosed that the National oil company is experiencing a “shortfall” and not a subsidy.
According to him, he said the landing cost of premium motor spirit known as petrol is about N1,200, but NNPC is selling it N600 per litre, and it costs the company N7.8 Trillion to make up for the “shortfall” from January to July of this year.
NNPC Chief Financial Officer
Photo Credit – NNPC
He stressed further by educating the general public on defining the subsidy to counter the claim by many quarters that the petroleum product is still subsidised.
He explained that, typically, the subsidy is defined as selling and buying products below its cost price.
In a report made from various sources, it is revealed that President Tinubu has assented to a proposal by NNPC to use gains from 2023 to pay for subsidies.
Howbeit, Aliyu, on Monday, denied those claims during a media chat on the NNPC’s 2023 audited financial statement.
He further said that the company was only trying to manage the shortfall in petroleum supply and importation between it and the federation.
He then disclosed that the federal government owed NNPC N7.8 trillion ($4.9 billion) in subsidy debt from January to July 2024.
He further revealed that, for nine years, no subsidy has been paid to any oil marketer because NNPC is the main importer of petrol as per the agreement signed with the suppliers.
Federal Government, Dangote Agree On Petrol Sale
“In the last eight to nine years, NNPC Ltd. has not paid anybody a dime as a subsidy; no one has been paid kobo by NNPC Ltd. in the name of subsidy,” Ajiya said.
“No marketer has received any money from us by way of subsidy.
What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price.
“So the difference between the landing price and that half price is a shortfall.
“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”
When quizzed on how much of the $4.9 billion could have gone into the federation account if NNPC was not paying for the “shortfall”.
It is obvious that the government of the All Progressives Congress (APC) is not truthful and looks to dissociate itself from “subsidy” which many have already described as a scam.
It is also to be noted that this was one of the weapons used during the campaign to gain victory over their rival, the People’s Democratic Party (PDP).
Federal Government And Dangote Refinery Agree On Petrol Sales