The Nigerian National Petroleum Company (NNPC) is set to implement an upward review of petrol prices at its retail stations and other independent outlets. This adjustment, effective from Wednesday, follows the NNPC’s decision to end its exclusive purchase agreement with the Dangote Refinery, opening the market to wider competition.
NNPC Ends Exclusive Purchase Agreement
Earlier reports revealed that the NNPC Limited has terminated its sole off-taker agreement with Dangote Refinery. Under the previous arrangement, the NNPC was the exclusive buyer of petrol from the refinery. With this change, other marketers will now be able to purchase directly from Dangote, creating a more open and competitive market.
This decision is aligned with the broader deregulation of Nigeria’s oil sector, where refineries can operate under a "willing buyer, willing seller" model. This approach allows both refineries and marketers to negotiate pricing without any exclusive agreements.
Price Adjustments Reflecting Cost from Dangote Refinery
The termination of the exclusive deal with Dangote Refinery has necessitated a revision in petrol pricing to align with actual production costs. Sources indicate that the NNPC and independent marketers are adjusting pump prices to reflect the refinery’s costs, which have been reported at around N953 per liter.
The bulk pricing of petrol is estimated to hover near N1,000 per liter, based on the pricing structure emerging from Dangote Refinery. This has led to price hikes at filling stations across the country as the new rates take effect.
Uncertainty Surrounding Petrol Imports
While the NNPC has not officially commented on this development, there is ongoing speculation regarding whether the company will continue importing petrol to supplement domestic production from Dangote Refinery. Repeated attempts to gain clarity from NNPC officials have yielded no formal response, and spokespeople from the Dangote Refinery have also remained silent on the issue.
Nevertheless, internal sources at the NNPC confirmed that petrol pricing is being adjusted in line with current market conditions and Dangote’s production costs. A senior official disclosed that bulk pricing has now reached approximately N953 per liter, highlighting the shift in the industry as the NNPC moves away from its exclusive purchasing agreement.
Conclusion
The upward adjustment of petrol prices marks a significant shift in Nigeria’s fuel market. The termination of the exclusive agreement between the NNPC and Dangote Refinery opens the door for more competition among marketers, which could ultimately reshape the pricing and supply landscape. However, uncertainty remains over whether the NNPC will continue importing petrol to meet national demand, as the country transitions into a more deregulated fuel market
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