The regulatory body recently revealed that it would end the exclusive purchasing rights it has enjoyed with the Dangote refinery in its young stint so far.
This information is courtesy of the Nigerian newspaper, PremiumTimes via its sources close to the development.
The information was also validated by an NNPC official in an interview with the aforementioned publication who stated “Yes, it is true. We can no longer continue to bear that burden.”
This simply implies that Dangote is now free to negotiate with marketers directly on how to set market prices, following the House of Representatives’ demand that the federal government order NNPC Ltd to let independent marketers purchase gasoline directly from the refinery.
“NNPCL and the major marketers being the exclusive off-takers spells monopoly, which is tantamount to greed. This is the same NNPC Ltd that has failed to manage our crude and refineries for decades,” member of the House, Oboku Oforji (PDP, Bayelsa), stated.
Dangote and the NNPC
Since the Dangote refinery began operations, this subject has been a bone of contention, with blame oscillating between the refinery and the NNPC about whose fault it is that Dangote’s locally produced Petrol is as expensive as imported petrol.
Prior to this news development, the regulatory body had revealed that it would purchase gasoline from Dangote refinery for N898.78 per liter and resell it to retailers for N765.99 per liter, which would entail paying about N133 in subsidies each liter.
It goes without saying that since the NNPC has ended its exclusive deal with Dangote to life petrol from his refinery, the subsidies they had placed would be eliminated.
Mid-way into September, as soon as Dangote insisted that he was ready to load trucks for distribution of his refined petrol, the NNPC declared that it would be the sole distributor of the product, while supplying approximately 385,000 barrels of crude oil per day to the Dangote Refinery.
Between then and the end of September, the NNPC moved about 103 million liters of gasoline from the Dangote Refinery. Of the 3,621 trucks, the refinery was able to load 2,207.
At the time only around 5% of local fuel traders were buying products from the Dangote Refinery. As a result, the refinery limited its sales to just 29 tankers of diesel per day.
Petrol Price saga
Earlier in September, there was a debacle between both parties on who would determine the price the Dangote fuel would sell at.
Initially, Dangote revealed that the petrol pricing structure would be crafted and approved by the Federal Executive Council under President Bola Ahmed Tinubu.
Despite that, it was reported that Nigeria was exploring the possibility of allowing Dangote’s refinery to determine the price of the gasoline.
This back and forth lingered with no decisive information reaching the general public.
As a result, the Dangote refinery will be required to provide the local market with diesel and PMS (petrol) of equal value, both represented by the naira.
The country’s Minister of Finance, Wale Edun, in a signed statement on Saturday, October 5, 2024, acknowledged the implementation of this policy and stated that it is an important move taken by the government to stabilize the economy and promote Nigeria’s economic growth and development.
