Revealed! See who will now determine fuel price in Nigeria

• Dangote's massive plant near Lagos's business district is starting to refine gasoline locally
• According to sources, Nigeria will allow Dangote to set the petrol price for petroleum merchants starting the next month
• FG claims that Dangote Refinery will undoubtedly never sell its goods for less than their market worth

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Nigeria is thinking of letting billionaire Aliko Dangote's refinery determine the price at which it sells petrol, a move that might reshape the government's authority over how much fuel consumers must pay.

Starting next month, sources said Nigeria will allow Dangote to set the price of gasoline for petroleum merchants. Photo Credit: Dangoote, Contributor
Source: Getty Images

Bloomberg reported that this is according to people with knowledge of the situation.

The biggest oil producer in Africa has up until now imported all of its gasoline and paid a high yearly price for it. However, Dangote's enormous factory close to the commercial center of Lagos is beginning to refine gasoline locally, which is a significant shift.

According to officials with knowledge of the situation, Nigeria would permit Dangote to determine the price of gasoline to petroleum marketers beginning next month.

The government said Dangote will be free to set its own price. State-owned oil company NNPC Ltd, the only importer of gasoline, has been reselling the product below market cost since August 2023 to temper prices after a brief removal of the subsidy pushed up inflation and sparked public protests.

This week, it lifted the price by 45%, to N897 ($0.56) per liter, moving it closer to market prices.

“Dangote Refinery will certainly not sell their products below market value as a business that was set up to make profit. I don’t see how NNPC or the federal government will control price for a private business,” said government spokesman Temitope Ajayi.

According to Ajayi, the regulator for the petroleum industry would be responsible for ensuring that the products are of a high standard and are priced fairly to prevent businesses from exploiting or taking advantage of the public.

The adjustments take place in the midst of acute gasoline shortages in key Nigerian cities as NNPC's ability to deliver gasoline was hampered by debts it incurred, partly as a result of the subsidy. It claimed that the government owed it N7.8 trillion, or $4.9 billion, in subsidy obligations for the seven months ending in July.

According to the sources, petrol merchants will soon be able to purchase goods straight from the Dangote Refinery.

NNPC spokesman Olufemi Soneye said,

“The market has been deregulated, meaning petrol prices are now determined by market forces rather than by the government or NNPC.”

According to Randy Hurburun, senior refinery analyst at consultancy Energy Aspects Ltd., when the facility is operating at full capacity, it should be able to produce roughly 330,000 barrels of gasoline per day, which is more than 1% of the global demand for the road fuel, or about 27 million barrels per day, more than enough to meet the UK's entire requirement.

Dangote refinery sends message to Nigerians

Legit.ng reported that Dangote Refinery has issued a statement on a report alleging that the Nigerian National Petroleum Company Limited (NNPC) has begun lifting from its facility in Lagos.

The company revealed this in a statement signed by Anthony Chiejine, the company’s Group Chief Branding and Communications Officer.

According to the statement, the NNPC has yet to commence product lifting at the refinery, let alone setting a price, stating that the PMS market is heavily regulated.

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Source: Legit.ng