Nigeria's state oil company, NNPC, has now agreed to purchase and distribute petrol processed by the Dangote refinery.

On Friday, a Nigerian presidential committee announced that the state-owned oil company NNPC Limited will handle the distribution of petrol from the Dangote refinery, which has a production capacity of 650,000 barrels per day. This move ends the previous deadlock that had impeded the distribution process.

The $20 billion refinery, constructed by Nigerian billionaire Aliko Dangote in Lagos, commenced petrol processing last week. However, disagreements regarding offtake rights and pricing had caused delays in distribution.

Zacch Adedeji, the head of Nigeria's tax authority, stated, "I am pleased to announce that all agreements have been finalized, and the first batch of Premium Motor Spirit (petrol) will begin loading on Sunday."

Adedeji clarified that in exchange for crude oil, Dangote will provide petrol and diesel of equivalent value to the domestic market, with transactions conducted in the local naira currency.

Regarding retail pricing, the Nigerian government had previously indicated that it would facilitate the sale of crude oil to Dangote in naira. Dangote's diesel, which has mainly been exported, will now be sold to local fuel traders in naira. For the time being, NNPC will hold exclusive rights to purchase petrol and distribute it locally, both in bulk to fuel traders and through its fuel stations.

At present, only about 5% of local fuel traders are purchasing products from the Dangote refinery, which is currently limiting its sales to just 29 tankers of diesel per day, according to an executive at the refinery. This executive also mentioned that local fuel traders are finding the refinery's retail pricing challenging, which they believe is adversely affecting their businesses.

According to sources within the government and NNPC, Nigeria's Punch newspaper reports that the state oil company will acquire a litre of petrol from the Dangote refinery at a price of 766 naira ($0.46).