The Nigerian National Petroleum Company (NNPC) will no longer be the sole buyer of petrol from Dangote Refinery, allowing other marketers to directly negotiate prices and purchase products from the facility.
This move aligns with the deregulated market practice, where refineries can sell on a willing buyer, willing seller basis.
Stressing that the implication would be that NNPC would no longer be the sole off-taker, and marketers can now negotiate prices directly with Dangote Refinery, the report added that the development aligned with the current practices for fully deregulated products, where refineries could sell directly to marketers on a willing buyer, willing seller basis.
The latest development is coming even as Dangote, the first privately-owned refinery in Nigeria, and the first concern – government-private to establish one in the last 35 years, has continued to maintain sealed lips over the actual price of its products, even after denying the claim of the NNPCL on the cost it got the product from the company, last month.
Even though there had been a counter position that the exit of NNPC as the sole off-taker would mean releasing its stranglehold on the refinery with the possibility of lowering the price of the commodity, there now fears that the company, seen as a corruption-ridden behemoth, would not allow any form of downward cost, because it would affect their own interest to import fuel at higher cost to Nigerians.
With the din across the country over the opaque nature of the agreement between the two entities, after the NNPCL began loading petrol from the Dangote Refinery on 15 September, the House of Representatives, had on September 26, called on the federal government to order the inclusion of independent marketers in the lifting petrol directly from the refinery, while also urging the management of 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.
The publication quoted insiders as saying NNPCL has relinquished it sole off-taker role to allow other marketers to directly purchase petrol from the refinery at the prevailing market price, promoting competition and potentially stabilising supply chains, adding: “Yes, it is true. We can no longer continue to bear that burden.”
The implication is that the company is now offloading the N133 per litre burden it has been shouldering on behalf of Nigerians after it announced that it purchased the product at N898.78 per litre and sold to marketers at N765.99 per litre, with the further implication being that the pump price, which has risen to as high as N1,000 per litre in some states, might go up again.
Nigeria’s economy had witnessed a serious downward turn after President Tinubu unilaterally announced the removal of subsidy, minutes after his inauguration as President of May 29, 2023, sending the cost of PMS from N189 to N550, instantly, a phenomenon which has witnessed several adjustments, amid cries of pain and death by suicide from populace who got overwhelmed by the situation.
Recall that in September, Devakumar Edwin, vice president of Dangote Industries Limited, revealed that the 650,000 barrels-per-day Dangote Refinery had commenced petrol production, with NNPC initially set to be the exclusive buyer.