Nigeria's Emerging Oil Dynamics: NNPC and Dangote Refinery

Nigeria's NNPC Ltd announced it would not be the sole buyer of gasoline from the new Dangote refinery unless market prices surpass pump prices. The 650,000 barrel-per-day facility recently began production, raising hopes of ending the country's costly gasoline imports. Dangote will set its gasoline prices independently.

Nigeria's state-owned oil firm, NNPC Ltd, revealed on Saturday that it will refrain from being the exclusive purchaser of gasoline from the recently inaugurated Dangote refinery unless market prices exceed those at the pump.

The Dangote refinery, boasting a capacity of 650,000 barrels per day, commenced gasoline production this week. This significant development has fueled optimism that Nigeria might finally end its dependency on expensive imported gasoline, a practice that has cost billions annually. Initially, it was believed that NNPC would be the sole buyer, with the government dictating prices. However, Dangote will now have the autonomy to set its own prices and sell directly to fuel marketers for distribution.

Historically, NNPC served as Nigeria's solitary gasoline importer. However, in a recent change, NNPC increased the petrol price from 617 naira per liter to 855 naira. For the current month, Dangote is set to provide 25 million liters of gasoline daily to the domestic market, with plans to increase this to 30 million liters by October. "NNPC Ltd. will exclusively offtake PMS from Dangote Refinery Ltd if market rates exceed Nigerian pump prices," the firm stated.

(With inputs from agencies.)