Nigeria's Fuel Market Opens Up: Dangote Oil Refinery Takes the Lead

Nigeria's decision to allow local fuel traders to purchase petrol directly from the Dangote Oil Refinery signifies a shift toward deregulating its processing sector. The move ends NNPC's buying monopoly, aiming for a competitive market and reducing reliance on imported oil products.

Nigeria's fuel sector is undergoing significant changes as local traders can now source petrol directly from the Dangote Oil Refinery. This development ends NNPC's exclusive purchasing rights, a move finance minister Wale Edun confirms aligns with Nigeria's agenda to deregulate its oil processing industry.

The Dangote Oil Refinery's entry into the fuel market began in September, initially designating NNPC Ltd as its sole buyer. However, a recent increment in fuel prices by NNPC marks the end of Nigeria's pricey subsidy scheme, revealing a significant shift to market-based pricing for the first time in over thirty years.

The decision to allow direct purchasing is expected to create a competitive market, simplify the supply chain, and ultimately support Nigeria's aspirations to reduce its dependence on imported oil products. The local currency sale of crude to Dangote, approved by a government committee, reinforces this transition.

(With inputs from agencies.)