Petrol price is likely to rise again following the decision by the Nigerian National Petroleum Company Limited (NNPCL) to end its exclusive offtake agreement with the Dangote Refinery, allowing other marketers to buy the product directly from the facility.
The current fuel cost was effected in August when the NNPCL adjusted the pump price from N568 to N855 per litre in Lagos, and to almost N900 in other parts of the country.
The NNPCL’s exit as a middleman in the Dangote Refinery implies that the national oil company will no longer cover the price gap between the facility’s price and the selling price to retailers, previously absorbing a subsidy of N133 per litre.
The NNPCL’s decision is seen as a crucial shift towards a fully deregulated oil market.
Marketers can now negotiate petrol prices directly with the Dangote Refinery under a “willing buyer, willing seller” arrangement, aligning with practices for other deregulated products such as diesel and kerosene.
In September, Devakumar Edwin, Vice President at the Dangote Industries, indicated that the 650,000 barrels per day refinery had begun processing petrol, with the NNPCL initially as the sole off-taker.
But recent adjustments allow independent marketers to engage with Dangote directly.
“We can no longer continue to bear that burden,” an NNPCL’s official told Premium Times, highlighting the financial strain of the subsidy system.
Leave feedback about this