NNPC Increases Petrol Prices Amid Dangote Refinery Deal

Nigerian state firm NNPC Ltd raised petrol prices by 11%, marking a second increase in two weeks. The hike follows NNPC's fuel purchase from Dangote refinery. This move comes amid rising inflation and public discontent, particularly affecting those reliant on generators due to limited national grid access.

In a notable economic shift, Nigerian state oil firm NNPC Ltd increased petrol prices by 11% on Monday, marking the second hike in two weeks. This follows NNPC's commencement of fuel purchases from the expansive Dangote oil refinery situated on Lagos' outskirts.

Nigeria is banking on the 650,000 barrels-per-day Dangote refinery to end its gasoline import dependency, which had been a long-standing issue due to subsidies removed by President Bola Tinubu. The sensitivity of gasoline prices in Nigeria stems from its widespread use among households and small businesses to power generators, compensating for an unreliable national electricity grid.

Effective Monday, gasoline prices rose from 858 naira per litre to 950 naira in Lagos, with prices reaching as high as 1,019 naira in northeastern regions. NNPC confirmed purchasing the fuel from Dangote at 898 naira per litre using U.S. dollars, although a naira-based purchase agreement is pending.

This price surge is likely to exacerbate public frustration amid an inflation rate of 33.4%, which has already heightened transport costs and sparked a cost-of-living crisis culminating in violent protests earlier this August. Recently, a presidential committee announced that starting October, NNPC will distribute gasoline from the $20 billion Dangote refinery to the local market, with plans for a naira-based payment system for crude supply and gasoline sales.

(With inputs from agencies.)