The Nigerian government has announced that the Dangote Refinery will commence the distribution of Premium Motor Spirit (PMS) starting Sunday, September 15th, 2024.
This strategic move is designed to alleviate pressure on the naira, reduce unnecessary transaction costs, and improve the availability of petroleum products across the country.
Finance Minister Wale Edun, represented by Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), made this announcement during a news conference in Abuja. Edun stated, "I am glad to announce that all agreements have been completed and loading of the first batch of PMS from the Dangote Refinery will commence on Sunday, September 15."
Under this new arrangement, the Nigerian National Petroleum Corporation Limited (NNPC) will supply approximately 385,000 barrels per day (kbpd) of crude oil to the Dangote Refinery, with payments made in naira. In return, the refinery will provide PMS and diesel of equivalent value for the domestic market, also paid in naira.
"Diesel will be sold in naira by the Dangote Refinery to any interested off-taker. PMS will only be sold to NNPC, which will then sell to various marketers for now," Edun explained.
To ensure smooth implementation, a one-stop shop will be established at the Nigeria Ports Authority (NPA) in Lagos.
This facility will coordinate service provision from all regulatory and security agencies, as well as other stakeholders. Additionally, a technical committee that worked on the initiative will transition into an implementation execution and monitoring committee based in Lagos for the next three to six months.
Edun highlighted the broader economic benefits of this initiative, noting,
"This will help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products in the country." He also expressed gratitude to President Bola Tinubu for championing the initiative and assured that the implementation team would work diligently to realize his vision.
The News Agency of Nigeria (NAN) reports that Edun chaired the presidential committee on the sales of crude oil and refined products for domestic consumption in naira.
The Federal Executive Council (FEC), under President Tinubu's leadership, had previously approved the sale of crude oil to local refineries in naira and the corresponding purchase of petroleum products in naira.
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