Dangote Petrol May Sell Between N857 and N865 Per Litre as NNPCL Begins Product Lifting

Premium Motor Spirit (PMS), commonly known as petrol, may soon sell for between N857 and N865 per litre as the Nigerian National Petroleum Corporation Limited (NNPCL) prepares to lift the product from the Dangote Refinery. This follows negotiations that aim to ease the burden of high fuel costs on Nigerians.

NNPCL, acting as the sole off-taker from the Dangote Refinery, is projected to lift petrol at N960 to N980 per litre and sell it to marketers at a rate of N840 to N850. This is expected to allow fuel stations to offer petrol to consumers at the new price range. However, there are concerns about whether a uniform price will be applied nationwide.

Currently, fuel prices vary significantly, with NNPCL retail outlets in Lagos selling petrol at N855 per litre, while major marketers charge as much as N920. Independent outlets have prices exceeding N1,000, with some areas seeing rates higher than N1,200.

N130 Under-Recovery in New Plan

The new arrangement, resulting from over a week of negotiations, is expected to create an under-recovery of approximately N130 per litre for NNPCL. According to a source close to the talks, President Bola Tinubu has emphasized the importance of ensuring that petrol prices do not impose an excessive financial burden on Nigerians, even amid changing market realities.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, expressed optimism that the deal will reduce the demand for foreign exchange (FX) used in importing petrol, thus alleviating pressure on the Naira. Currently, up to 40% of FX demand in Nigeria is linked to fuel imports.

NNPCL Prepares for Petrol Lifting with 300 Trucks

NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, confirmed that the company has begun deploying trucks and vessels to the Dangote Refinery in preparation for the lifting of PMS, scheduled to start on September 15. At least 100 trucks have already arrived, with the number expected to reach 300 by the end of the weekend.

Awaiting Pricing Clarity

Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) Executive Secretary, Olufemi Adewole, acknowledged that while they have been lifting other fuels such as diesel and jet fuel, they are still waiting for clarification on the pricing model for petrol.

Meanwhile, Edun reiterated that the structuring of the deal in Naira would help stabilize the local currency by reducing unnecessary transaction costs and enhancing fuel availability. The Federal Executive Council (FEC) has approved the sale of crude oil to local refineries in Naira, along with the corresponding purchase of petroleum products in the local currency.

Starting October 1, NNPC will supply approximately 385,000 barrels per day (bpd) of crude oil to the Dangote Refinery, paid for in Naira. In return, the refinery will supply petrol and diesel, also to be sold in Naira.

Analysts expect the deal to ease the current fuel shortages and potentially bring down prices, providing much-needed relief to Nigerian consumers.