Premium Times on Monday, reported that the Nigerian National Petroleum Company Limited, (NNPCL) will be “ending its exclusive purchase agreement with Dangote Refinery” a move which will throw the market open for other marketers to have direct contact with the refinery for product purchase.
Accordingly, the NNPCL today, adjusted their pumps prices across the country to reflect the new pricing which will see Nigerians pay as high as N1,030 for a litre of petrol.
This will be the fourth time the cost of petrol has been increased since the administration of President Tinubu came on board in May 2023.
First increment
The FG had clarified that the continuous payment of over N400 billion monthly for subsidy was no longer feasible.
The NNPCL issued an official announcement in May 2023 following the President’s statement raising fuel prices from N195 per liter, to between N448 and N557 per litre across the country indicating a 185.64% increment.
Second increment
The second increment came later in June 2023 as PMS prices jumped again from N557 to N617 indicating an increase of 10.77%. According to the NNPCL, the increment was due to ‘market forces’. The president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Okoronkwo, corroborated this during an interview, revealed that the price increment was a result of the market fundamentals that could not be controlled locally.
Third increment
The increment continued in September 2024 as petrol stations once again, adjusted their pump prices increasing PMS prices by 45.38% from N617 to N897 per liter.
The increment followed an announcement by the NNPCL disclosing the company was facing severe financial constraints, including high debt to petrol suppliers.
The body In a statement signed by the Chief Corporate Communications Officer, Olufemi Soneye said. “The financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply,”
Fourth increment
Following the decision of the NNPCL to quit its middleman role between marketers and the Dangote refinery, the NNPCL and other marketers adjusted pump prices at their stations to reflect the actual cost of petrol at the refinery.
Various NNCPL outlets nationwide adjusted their pump price increasing the cost by 15% to N1,030 per litre while other marketers across the country have also adjusted their prices to reflect the current market realities.
As the NNPC exits the market as middleman, the implication is that the national oil company will stop taking care of the price gap between the refinery’s price and the selling price to retailers.
Recall the NNPCL had claimed in September that it purchased petrol at N898.78 per litre from the Dangote Refinery while it sold to marketers at the rate of N765.99 per litre. With this arrangement, the NNPC bore the burden of paying off almost N133 for each litre of petrol purchased.
Sources familiar with the development have projected prices in the North-east, to range between N1,060 and N1,070 while in the South-south, prices are expected to move between N1,055 and N1,075 per litre for the product.
The increment will see customers in Lagos pay N998 per litre, Abuja pump price is N1,030 per litre and other South west states will pay N1025 per litre of PMS while customers in the South East will pay N1,045 per litre.
