Major oil marketers will begin purchasing Premium Motor Spirit (PMS), commonly known as petrol, directly from the Dangote Petroleum Refinery starting Thursday through next week. This follows the Nigerian National Petroleum Company Limited’s (NNPCL) decision to step down as the sole buyer of petrol from the $20 billion refinery.
Multiple sources from NNPCL and the Major Energy Marketers Association of Nigeria confirmed that NNPCL will no longer exclusively procure petrol from Dangote, allowing other downstream players to buy directly from the refinery.
Unverified reports have also suggested that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has released new, higher petrol prices for various locations across the country. However, NMDPRA spokesperson George Ene-Ita did not confirm this development when contacted, and he did not respond to messages seeking clarification.
Oil marketers indicated that NNPCL’s move to stop being the sole off-taker of Dangote petrol signals the end of the government’s petrol subsidy.
A previous report on September 25 noted that the government might spend approximately N236 billion monthly to subsidize petrol, including the petrol imported by NNPCL and that purchased solely from Dangote. It was estimated that NNPCL was subsidizing Dangote petrol to the tune of N3.3 billion daily, which could total N99 billion in 30 days. By stepping down as the sole off-taker, NNPCL may now avoid this cost.
Previously, the government announced that crude would be sold to Dangote in naira starting October 1, and in return, the refinery would provide PMS and diesel to the domestic market, also to be paid for in naira.
A senior official from a major oil marketing firm confirmed that while marketers have not yet started buying petrol directly from the Dangote refinery, they had received the directive on Tuesday to begin doing so.
The official also noted that Dangote has yet to announce a price for its petrol, but the decision means that NNPCL will no longer purchase the product at subsidized rates, effectively ending the subsidy.
The same marketer added that dealers have not yet raised their prices, but this could change once Dangote sets its prices. Another official from the Major Energy Marketers Association of Nigeria (MEMAN) confirmed the change in the petrol procurement process.
The Managing Director of another major marketing company said it is expected that marketers will start purchasing directly from Dangote next week, as the transition from NNPCL to Dangote takes time.
A source from NNPCL also confirmed that the company has pulled out as Dangote’s sole off-taker due to the financial burden, and that petrol prices will now be determined by market forces.
An imminent petrol price hike is expected, with a new NMDPRA template indicating a potential rise to N1,029.01 per liter in the Federal Capital Territory. In Lagos, the projected price is N991.21, compared to the current NNPC price of N855.
In Kano, the indicative price is N1,040.31, compared to the current price of N904. This price shift comes as NNPCL ceases its role as the sole off-taker of Dangote petrol, leaving the market to determine future pricing.
, commonly known as petrol, directly from the Dangote Petroleum Refinery starting Thursday through next week. This follows the Nigerian National Petroleum Company Limited’s (NNPCL) decision to step down as the sole buyer of petrol from the $20 billion refinery.){kind=link}