The Federal Government of Nigeria has authorized marketers to lift Premium Motor Spirit (PMS), commonly known as fuel, directly from the Dangote Refinery.
This new arrangement eliminates the need for marketers to route their purchases through the Nigerian National Petroleum Corporation Limited (NNPCL).
The announcement was made on Friday by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
This strategic move follows directives from the Federal Executive Council (FEC) and aligns with the implementation of a new naira-based sales mechanism for crude oil and refined products.
During the second review meeting of the implementation committee, Edun highlighted the significance of this change, stating, “The most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries.”
This marks a pivotal shift from the prior system where NNPCL served as the sole purchaser and distributor of PMS.
The minister emphasized that the objective is to allow for a free market environment marked with competitiveness.
He explained, “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.”
Edun further noted that with the commencement of local PMS production, the market is now better equipped to support these direct transactions.
He stated, “This transition is expected to enhance efficiency in product availability and stabilize market conditions for the benefit of all Nigerians.”
The committee also acknowledged that there are questions and discussions regarding this change in the market structure.
Edun assured, “We are committed to providing clarity on this development and will continue to engage with stakeholders to ensure a seamless transition process.”
With this move, marketers can negotiate commercial terms directly with refineries, which the minister believes will help in fostering a more competitive market environment.
He concluded that the commencement of local production of PMS will be a game changer for the industry.
