The Dangote Petroleum Refinery has begun supplying Premium Motor Spirit (PMS), commonly known as petrol, directly to some oil marketers, bypassing the Nigerian National Petroleum Company Limited (NNPC).

Reports indicate that more marketers are seeking to purchase PMS directly from the refinery, while others continue importing the product, with hundreds of millions of liters of imported petrol expected to arrive in Nigeria in the coming weeks.

Earlier, The PUNCH reported that at least four vessels carrying imported PMS had docked at Nigerian ports between October 18 and October 20, with around 123.4 million liters of PMS unloaded at two seaports to help stabilize nationwide fuel supply.

This move by marketers comes in addition to the $20 billion Dangote refinery’s output, providing further support to the market.

Marketers have now begun lifting PMS directly from the Dangote plant in Lekki, Lagos, signaling a significant change in Nigeria’s fuel supply chain.

According to a senior refinery official, this direct purchase arrangement operates on a willing-buyer, willing-seller basis, allowing oil marketers to bypass third-party suppliers and engage directly with the refinery.

“Marketers are already coming to the refinery to lift PMS directly, and agreements have been made with some marketers. If the price wasn’t favorable, they wouldn’t be coming to us,” the official said, indicating that Dangote’s pricing is competitive enough to attract interest.

“Some of the trucks you saw there today were from marketers purchasing the product directly from Dangote, without recourse to NNPC. So the direct sale has started,” another source told The PUNCH.

Officials also revealed that the refinery is dedicating around 53% of its crude oil supply to PMS production due to high demand for petrol in Nigeria and other countries.

The proportion of crude used for PMS may change if demand for other products grows, but for now, petrol remains the primary focus.

“This could be reviewed in future if the demand for other finished products increases more than the demand for petrol, but right now about 53 per cent of our crude is used for petrol production, while other products account for the remaining percentage,” the official stated.

When asked if marketers had started the direct purchase of petrol from Dangote without recourse to NNPC, one of the notable major marketers in the country replied in the affirmative.

“Yes, everyone is in the process. This was advised that it would happen soon and is a normal business transaction,” the source stated.

This direct sale initiative follows earlier claims that the NNPC would be the sole off-taker of PMS from the Dangote refinery starting September 15.

However, a recent announcement from the Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency, headed by Finance Minister Wale Edun, confirmed that marketers can now purchase PMS directly from local refineries, fostering competition and improving market efficiency.

Although some Independent Petroleum Marketers Association of Nigeria (IPMAN) officials, led by Vice President Hammed Fashola, are still in discussions about logistics and modalities for lifting PMS from Dangote, refinery officials confirmed that direct sales to certain marketers have already commenced.

Meanwhile, the refinery has dismissed claims that it sold PMS to NNPC at N898 per liter when sales began in mid-September, labeling such reports as misleading.

The refinery maintains that the official naira-for-crude committee will eventually announce the product’s price, but as of October 22, no such announcement has been made.

The federal executive council (FEC) has approved N740 billion for the construction of the Kano-Abuja road project.

The approval was given on Wednesday during the weekly FEC meeting presided over by President Bola Tinubu at the State House in Abuja.

David Umahi, minister of works, who briefed State House correspondents after the meeting, said the government is working on managing the extensive backlog of infrastructure projects.

According to Umahi, the Abuja-Kano road, previously slated for a tax credit arrangement, “will now be procured without such a provision, with the 162-kilometer Berger section already approved for N740 billion”.

The minister also announced that the Shagamu-Benin road is undergoing critical rehabilitation, while procurement processes are being finalised for its full reconstruction using reinforced concrete pavement.

He highlighted other projects undergoing review, including the commencement of construction on the Sokoto-Badagry road, with the Sokoto section to be flagged off imminently. 

Umahi also said works on the Oyo-Ogbomosho road, a project stalled for 18 years, will resume, and the Makurdi-Katsina-Ala road will undergo significant repairs.

“FEC also tackled the inherited debt profile of N1.6 trillion tied to 2,604 projects, with a total contract value of N13 trillion,” Umahi said.

To manage the backlog, the minister said the ministry of works has initiated a phased approach to project completion based on available funding. 

Umahi said examples of projects in the category are the phasing of the Biu-Kangiwa-Kamba-Kaya Niger Republic road in Kebbi state, the Yola-Hong-Mubi road in Adamawa state, and the Kachako-Dambazua road in Kano state.

On July 29, the FEC approved N1.4 trillion for some road projects across the country.

‘30% ADVANCE PAYMENT TO CONTRACTORS’

Umahi said the council approved advanced payment mechanisms to combat inflation and rising costs driven by fluctuating exchange rates and petroleum prices.

“And finally, we presented a memo to FEC that where there is proof of funds, there is available funds, the Procurement Act allows MDAs to pay a maximum of 30 percent advance payments. And let me emphasise that this advanced payment. When you read the law, it say may pay,” Umahi said. 

“And so when people are giving contracts and they don’t mobilise, and they said, I’ve not paid mobilisation, it is not legally binding, because the word says may pay. And so some people turn it (to) shall pay. So no, it’s may pay.

“So where we have funds, and they will have a valuable fund beyond this 30% so what we are, you know, we requested from FEC is approved, that we first pay 30% which is the Procurement Act, and not more, and then when the contractor has started work, and to the satisfaction of the Ministry of works, we should be allowed to pay additional funds. 

“Yes, the law allows us to pay in terms of you know, materials on site. But we are asking beyond that, what is the essence of this? Is to mitigate a lot of fluctuation and inflation, because we have a lot of you know, indices that affect the ministry of works like the petroleum you know it affects it.”

The minister also said the dollar exchange rate affected negotiations, adding that the ministry is “doing everything to manage the resources within the available funds so that we mitigate inflation”.

Year-to-date, the naira has depreciated by 59.79 percent in the official window, declining from N1,035.12 per dollar on January 3, to N1,654.09/$ on October 23.

In the parallel market, the naira has depreciated by 40.65 percent, from N1,230/$ to N1,730 per dollar, within the same period.