Federal Government Allows Marketers to Buy Petrol Directly from Dangote Refinery
The Federal Government has authorized petroleum marketers to purchase petrol directly from the Dangote refinery and other local refineries, bypassing the Nigerian National Petroleum Company Limited (NNPCL).
According to the Minister of Finance, Wale Edun, this new direct purchasing mechanism enables marketers to negotiate commercial terms directly with refineries, fostering a more competitive market environment and smoother supply chain.
This development marks a significant shift towards a fully deregulated oil industry. Previously, the NNPCL was the sole purchaser and distributor of petrol from refineries.
The Dangote refinery began selling petrol to the NNPCL at N898.78 per liter, while the NNPCL sold it to marketers at N765.99 per liter, covering a subsidy of N133 per liter. However, this arrangement was deemed unsustainable.
The NNPCL recently increased the retail price of petrol to over N1000 per liter across its stations. This move aims to establish a market-determined price for petrol in the post-subsidy environment.
Fuel queues have been a persistent issue in major cities, but the price increase has led to some reduction. The government’s goal is to create a more competitive market, reducing challenges for citizens.
Key developments:
- Federal Government authorizes direct petrol purchase from local refineries
- Marketers can negotiate commercial terms with refineries
- Shift towards a fully deregulated oil industry
- NNPCL increases retail petrol price to over N1000 per liter.
