The Federal Government has said all petroleum marketers can now negotiate and buy products directly from the Dangote Refinery, Lagos.
A statement by the Ministry of Finance indicated that the decision to allow oil marketers to deal directly with the refinery firm was reached at a meeting of the technical committee headed by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.
The meeting was held in Abuja on Friday.
The leeway given by the Federal Government has ended the arrangement in which the Nigerian National Petroleum Company Limited (NNPCL) was acting as the sole off-taker of the Dangote Refinery products.
Edun said its decision followed the directive of the Federal Executive Council (FEC) and the implementation of the new Naira-based sales mechanism, adding that the Implementation Committee on the Sales of Crude Oil and Refined Products in Naira, of which he chaired held its second review meeting on Wednesday, October 10, 2024.
He said the meeting focused on assessing the transition towards a deregulated market structure for Premium Motor Spirit (PMS) and addressing the change in the purchasing model for petroleum product marketers.
Giving key update on New Direct Purchase Model, the minister said the most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries, saying that this marks a departure from the previous arrangement where the NNPCL served as the sole purchaser and distributor of PMS from the refineries.
According to him, “This direct purchasing mechanism allows marketers to negotiate commercial terms directly with the refineries, fostering a more competitive market environment and enabling a smoother supply chain for petroleum products.
“Local Production of PMS: With the commencement of local PMS production, the market is better equipped to support these direct transactions. This transition is expected to enhance efficiency in product availability and stabilize market conditions for the benefit of all Nigerians.”
Edun stated that the committee recognizes that there are questions and discussions regarding this change in the market structure, adding, “We are committed to providing clarity on this development and will continue to engage with stakeholders to ensure a seamless transition process the Minister informed.”
He described the direct purchase of PMS by petroleum product marketers as a new era of growth and development for Nigeria’s petroleum industry and reassured stakeholders that the Committee will continue to provide clarity and engage with stakeholders to ensure the success of this new regime.”
