The Federal Government has granted approval for petroleum marketers to begin sourcing petrol directly from the Dangote Refinery. This decision, announced in a statement signed by the Minister of Finance and Chairman of the Naira-Crude Sale Implementation Committee, Wale Edun, was made public on Friday, October 11.
Edun's statement provided updates on the implementation of the crude purchase and refined product sales in naira, marking a significant shift in Nigeria's fuel distribution process. The announcement followed the second post-commencement review meeting of the Naira-Crude Sales Implementation Committee, held on October 10.
“The committee is pleased to report a successful transition of operations in line with the directive issued by the Federal Executive Council,” the statement read. It went on to highlight that a robust framework for local production and distribution of crude oil and refined products for domestic consumption in naira is now fully operational.
“With this mechanism now in full operation, along with the commencement of local production, we are well-positioned to transition to a fully deregulated market for all petroleum products," the statement continued.
This development allows petroleum product marketers to purchase Premium Motor Spirit (PMS) directly from local refineries without the Nigerian National Petroleum Corporation Limited (NNPCL) acting as an intermediary. The government encourages marketers to engage in direct negotiations with refineries on mutually agreed commercial terms, which is expected to foster competition and improve market efficiency.
Before this shift, NNPCL served as the middleman between marketers and the Dangote Refinery. However, the national oil company opted out of the arrangement last week, paving the way for direct transactions between marketers and refineries.
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