Petrol Price set to drop as the Nigerian National Petroleum Corporation Limited (NNPCL) prepares to start lifting Premium Motor Spirit (PMS) from Dangote Refinery.
Insiders revealed that the pump price could range between N857 and N865 per litre, a substantial relief from the over N1,200 per litre currently charged in some parts of the country.
NNPCL, serving as the sole off-taker of petrol from the newly operational Dangote Refinery, is expected to lift the product at N960 to N980 per litre and sell it to marketers at N840 to N850. This will enable Nigerians to access it at a more affordable price in filling stations. However, uniformity in petrol pricing across the country remains uncertain.
As of yesterday, NNPCL retail stations in Lagos sold petrol at N855 per litre, which remains the cheapest price nationwide, while major marketers sold it for approximately N920 per litre. Independent marketers have been selling above N1,000, leading to widespread frustration among consumers.
Negotiation Milestones
After intensive negotiations lasting over a week, NNPCL and Dangote Refinery have finally struck a deal that ensures Nigerians will get petrol at a more manageable price. The current arrangement includes an under-recovery of around N130 to the NNPCL, which represents a significant concession from the corporation. A source from the Presidency confirmed that President Bola Tinubu insisted the new petrol price should not place an excessive financial burden on citizens amid rising costs.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, expressed optimism that the new pricing structure would reduce the pressure on foreign exchange (FX) demands, as 30-40% of Nigeria’s FX goes into PMS importation. By procuring and selling crude oil and its products in Naira, the government aims to stabilize the naira’s value.
NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, confirmed that the corporation has begun deploying trucks and vessels to Dangote Refinery to lift petrol, with operations scheduled to commence on September 15, 2024. “At least 100 trucks are already on-site, with an expected increase to 300 by Saturday evening,” Soneye revealed.
Market Impact and Supply Chain Readiness
Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) Executive Secretary, Olufemi Adewole, expressed excitement about the new development, noting that marketers are ready to meet Nigerians’ energy needs. “We are already lifting diesel and aviation fuel. Once the petrol pricing structure is clarified, we will adjust accordingly,” he said.
The Minister of Finance, represented by Federal Inland Revenue Service (FIRS) Chairman Dr. Zacch Adedeji, reinforced that the structuring of the NNPCL-Dangote Refinery deal in Naira would alleviate pressure on the local currency, eliminate unnecessary transaction costs, and ensure better availability of petroleum products in the domestic market.
“The agreement is a game-changer for Nigeria. From October 1st, NNPC will begin supplying 385,000 barrels of crude oil per day to Dangote Refinery, with all transactions executed in Naira. In return, Dangote Refinery will supply PMS and diesel of equivalent value, also in Naira. Diesel will be available to any interested off-taker, while PMS will exclusively go to NNPC for nationwide distribution,” Edun explained.
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