Panic as NNPC Quits as Sole Buyer of Dangote Petrol?

By Adedapo Adesanya

There is renewed panic that could increase petrol prices nationwide as the Nigerian National Petroleum Exporting Company (NNPC) Limited has reportedly quit its sole petrol buyer position in the 650,000 barrel per day capacity Dangote Refinery.

The move opens up the market for other marketers to buy petrol directly from the refinery, meaning retailers will likely price petrol based on their margins.

Premium Times on Monday reported that NNPC Limited will no longer be the sole off-taker, and marketers can now negotiate prices directly with Dangote Refinery.

Recall that when the Dangote Refinery started processing petrol in September, the NNPC was the only entity allowed to buy and resell to marketers, who then distribute to others.

The NNPC announced that it would buy petrol from Dangote Refiner at N898.78 per litre and sell to marketers at N765.99 per litre, shouldering a subsidy of almost N133 per litre.

The NNPC lifted about 103 million litres of petrol from Dangote Refinery between September 15 and 30. The refinery was able to load 2,207 of the 3,621 trucks sent to it within the period under review.

Now, with this agreement possibly phasing out, it means many marketers will decide the price at which they will sell the product, a move that may lead to a hike in the product’s price.

This development also means marketers can now source products from anywhere, promoting competition and potentially stabilising supply chains.

This means the importation of petrol will likely continue if marketers are not comfortable with the prices being negotiated with Dangote Refinery.

Business Post had reported that the House of Representatives called on the federal government to mandate the NNPC and Dangote Refinery to allow independent marketers to lift petrol directly from the refinery.

The lower chamber also urged the management of Dangote Refinery to build, acquire, or partner to establish tank farms or depots across the geo-political zones of the country, to ease access to petroleum products for the public.