Concerns as Dangote refinery falls short on fuel supply commitment

Concerns are escalating in Nigeria’s energy sector as the highly-anticipated Dangote Refinery has failed to meet its fuel supply obligations to the Nigerian National Petroleum Company Limited (NNPC Ltd).

The refinery, which was expected to revolutionize Nigeria’s fuel production, was supposed to deliver 25 million liters of Premium Motor Spirit (PMS) daily. However, it has only managed to supply 16.3 million liters, resulting in a shortfall of 8.7 million liters.

On Sunday, the Dangote Refinery began supplying fuel to the NNPC, releasing a total of 12,200 metric tonnes (16.3 million liters) from Tank No. 3201D. Despite this, the amount falls significantly short of the daily target agreed upon with NNPC Ltd.

This discrepancy has sparked anxiety among stakeholders who are concerned about the refinery’s ability to meet its commitments. According to sources, NNPC Ltd had issued a Letter of Credit (LC Ref SBLCxxxxT0083) for over $120 million to cover the initial supply of 25 million liters.

READ ALSO: Finally, NNPC releases PMS prices from Dangote Refinery

The refinery’s failure to deliver as planned has raised questions about its operational capabilities.

NNPC Ltd’s Chief Corporate Communication Officer, Olufemi Soneye, confirmed that the company mobilized over 300 trucks and a vessel to transport the fuel from the refinery.

Despite the shortfall, Soneye emphasized that the first batch of PMS was loaded at N898 per liter, countering reports that the price was N1,300 per liter. He also confirmed that over 70 trucks had been loaded with the initial batch, with more scheduled for subsequent deliveries.

The refinery has acknowledged the supply and has shared videos of the loading process on its social media handle. However, the failure to meet the agreed supply target continues to create uncertainty and concern within the energy sector.

Further investigations showed that trucks deployed by NNPC Ltd loaded the product just as Dangote Refinery also confirmed this development by posting videos of the trucks on its X handle.

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Soneye confirmed that NNPC Ltd loaded the first batch at the cost of N898 per liter.

He had said in a statement: “We successfully loaded PMS today at the Dangote Refinery. The report stating that we purchased it at N1,300 per liter is false.

“For this initial loading, the price was N898 per liter. I can also confirm, in response to your inquiry, that we will receive 16.8 million liters. As of now, we have loaded over 70 trucks and more trucks are going to load also.”