Dangote Refinery to Boost Local Gasoline Distribution After Deal Resolution

Nigeria's NNPC Limited will distribute gasoline from the Dangote Refinery to the domestic market following the resolution of previous disagreements over offtake rights and pricing. The $20 billion refinery, owned by Aliko Dangote, will supply gasoline and diesel in exchange for crude oil, with transactions settled in local currency.

Nigeria's presidential committee confirmed on Friday that state-owned oil company NNPC Limited will commence gasoline distribution from the Dangote Refinery to the local market, resolving the stalemate that had previously halted dispatches.

The $20 billion refinery, constructed by billionaire Aliko Dangote in Lagos, initiated gasoline processing last week. Earlier disputes over offtake rights and pricing delayed distribution. "I am pleased to announce that all agreements have been finalized, and the first batch of Premium Motor Spirit (Gasoline) will start loading on Sunday," stated Zacch Adedeji, chief of Nigeria's tax authority.

Adedeji explained that Dangote will provide gasoline and diesel equivalent to the crude oil received, with transactions conducted in naira. The government had earlier assured crude sales to Dangote in the local currency.

Initially, Dangote's diesel, primarily intended for export, will now be available to local fuel traders in naira, while NNPC retains exclusive rights to distribute gasoline both in bulk and at its gas stations. Currently, about 5% of local traders purchase from Dangote Refinery, limiting sales to 29 tankers of diesel per day, according to a refinery executive.

The executive highlighted that local traders are facing challenges with the refinery's retail pricing, affecting their businesses negatively.

(With inputs from agencies.)