Why oil marketers will begin direct petrol purchase from Dangote Refinery

• Major oil marketers have disclosed that they will soon purchase petrol from the 650,000pdd-capacity Dangote refinery
• The marketers disclosed this as the Nigerian National Petroleum Company Limited (NNPC) ended its agreement with the refinery
• The move has now paved the way for marketers to lift petrol directly from the Dangote Refinery

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Major oil marketers are set to begin directly purchasing petrol from the Dangote Refinery as the Nigerian National Petroleum Company (NNPC) ends its agreement with the facility.

A report cited sources at the NNPC and Major Energies Marketers Association of Nigeria (MEMAN), which confirmed the development on Tuesday, October 8, 2024, saying that the state oil company was no longer the sole distributor of Dangote petrol.

Marketers begin plans to lift Dangote petrol as NNPC exits agreement Credit: Bloomberg/Contributor
Source: Getty Images

NNPC hikes petrol prices

The decision now paves the way for marketers to buy the product directly from the mega refinery.

The development comes as the NNPC hiked petrol prices from N897 to N987 per litre in Lagos and above N1,000 in other states.

Meanwhile, oil marketers said the NNPC's decision to quit the middleman’s role in the Dangote refinery means that the petroleum industry has been deregulated completely.

Punch reports that the Nigerian government may spend about N236 billion monthly on petrol subsidies.

An NNPC official reportedly confirmed on Tuesday, October 8, 2024, that dealers are yet to commence direct purchase of petrol from the Lekki-based refinery.

New NNPC price list surfaces

Legit.ng earlier reported that PMS data pricing framework across eight states from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) shows that petrol prices at retail outlets nationwide will rise to at least N991.21 per litre from N987 per litre.

Estimated prices in some cities

A data review shows that in Abuja, petrol may sell for as high as N1,029 in all retail outlets, while petrol prices in Lagos will rise to N991.21 per litre, N,1040.31 in Kano, and N1,007.35 in Calabar.

PMS will sell at an average price of N1,045.72 per litre in Sokoto, N1,059.39 in Maiduguri, N999.27 in Ibadan, and N1,022 in Enugu.

Legit.ng earlier reported that the NNPC quit its role as the sole off-taker of Dangote petrol on Monday, October 7, 2024, ending the exclusive purchase agreement with the 650,000 refinery.

The development means NNPC will cease to be the sole distributor of petrol from Dangote, paving the way for marketers to negotiate and lift the product from the refinery.

NNPC to cease paying subsidy on Dangote petrol

Premium Times reports that the NMDPRA document provides insight into the subsequent payment differentials paid by the state oil firms in major Nigerian states and what Nigerians may pay at the pumps without subsidy.

The agency regulates midstream and downstream operations in Nigeria, including technical, operational, and commercial activities.

A ten-day petrol data list pricing framework weighted averages from September 23 to October 4, 2024, shows that the NNPC paid about N134.5 per litre as a differential in eight cities.

Dangote to take 400,000bpd of Nigerian crude

A previous report by Legit.ng disclosed that the Dangote Refinery is ready to process 400,000 barrels of crude daily over the next two months and will reach total capacity in the coming months.

Bloomberg reports that a cargo allocation list shows the plant is set to get about 24 million barrels of crude in October and November, showing a shift towards using more domestic supplies.

Analysts believe the increased demand from the 650,000 bdp-capacity refinery could significantly tighten the West African crude oil market in the last quarter of 2024.

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Source: Legit.ng