The federal government has approved a new policy allowing petroleum product marketers to purchase Premium Motor Spirit (PMS), commonly known as petrol, directly from local refineries, including the Dangote Refinery.
According to The Nation, this marks a significant shift from the previous arrangement, where the Nigerian National Petroleum Company Limited (NNPC) acted as the sole purchaser and distributor of PMS from refineries.
The announcement was made by the Minister of Finance and Chairman of the Naira-Crude Sale Implementation Committee, Wale Edun, in a statement released on Friday, October 11.
Edun stated that this change aims to create a more competitive market environment and improve the efficiency of fuel distribution across the country.
“Following the directive of the Federal Executive Council (FEC) and the implementation of the new Naira-based sales mechanism, the most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries,” Edun said in the statement.
He explained that this new direct purchasing model will allow marketers to negotiate commercial terms with refineries, creating a more streamlined supply chain.
This transition is expected to boost local PMS production, with local refineries such as Dangote Refinery playing a crucial role in meeting the country’s fuel demands.
The government expressed optimism that the new policy will lead to improved product availability and help stabilize market conditions, ultimately benefiting Nigerian consumers.
The new policy comes as fuel prices have reached unprecedented levels, with NNPC recently increasing the pump price to ₦1030 per liter in some regions, sparking concerns among citizens.
The direct purchasing mechanism aims to alleviate some of these pressures by increasing market competition and reducing supply chain bottlenecks.
The move has been welcomed by many stakeholders in the petroleum industry, who believe it could help ease the strain on fuel distribution and contribute to a more sustainable supply of PMS nationwide.
The government has assured continued engagement with stakeholders to ensure a smooth transition under the new purchasing system.
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