Oil marketers are closely monitoring developments as the Dangote Petroleum Refinery begins a test-run of petrol production, with the official release expected by September.
According to a report by Reuters, the Dangote Petroleum Refinery is currently testing its petrol production capabilities, with full-scale operations anticipated by mid-September.
However, there are indications that the timeline might be extended further, as noted by IIR Energy, a global market intelligence provider for the commodity trading community.
In a recent note to its clients, IIR Energy hinted at the possibility of additional delays, although the specifics remain unclear.
When contacted on Thursday, the spokesperson for Dangote Refinery, Anthony Chiejina, did not provide a comment regarding the ongoing production tests.
Meanwhile, members of the Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) are awaiting the announcement of the official price for petrol from the $20 billion facility.
On August 20, it was reported that a government committee, established to facilitate the sale of crude oil to local refineries in naira, had finalized an agreement with the Dangote Petroleum Refinery to roll out petrol in September. The report also mentioned that crude oil sales to the Dangote Refinery and other local refineries are scheduled to begin on October 1, 2024.
This announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a meeting with the Implementation Committee in Abuja. Additionally, the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, confirmed that the first petrol delivery from the Dangote Refinery is expected next month.
However, Mustapha Zarma, the National Operations Controller of IPMAN, stated that oil marketers are still waiting for the price per litre from the refinery. He also expressed concerns that the current market dynamics might make it challenging for marketers to purchase petrol from the refinery unless the government intervenes.
Zarma highlighted that the pump price of petrol in Nigeria is currently below the actual market value, a situation echoed by recent statements from the Nigerian National Petroleum Company Limited (NNPC). MEMAN recently estimated the landing cost of petrol at approximately N1,117 per litre.
The Dangote Refinery is unlikely to sell its product below cost unless there is government intervention, Zarma noted. The NNPC, as the sole importer of petrol into Nigeria, continues to shoulder the burden of subsidizing the product.
The timeline for the refinery’s operations has seen multiple adjustments. Aliko Dangote, President of Dangote Group, initially announced in May 2024 that petrol production would commence in June, eliminating the need for imports. However, this target has since shifted, with the latest projections pointing to a September release.
An official from MEMAN, speaking anonymously, explained that the refinery is taking the necessary time to ensure that the petrol produced meets the required specifications. The process involves continuous blending and testing until the product reaches the desired standards.
“The process is similar to cooking, where you continuously adjust the ingredients until the taste is just right,” the official remarked, describing the meticulous process of refining petrol to meet the necessary specifications.
(PUNCH)
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