The Nigerian National Petroleum Company Limited (NNPC) has ended its exclusive offtake agreement with Dangote Refinery, now allowing other marketers to purchase petrol directly from the facility.
This shift is expected to impact fuel prices as NNPC will no longer bear the cost difference between the refinery price and the retail sale price, previously covering a subsidy of about ₦133 per litre.
This change marks a shift toward full deregulation in Nigeria’s oil market.
Independent marketers can now negotiate petrol prices directly with Dangote under a “willing buyer, willing seller” framework, similar to the arrangements for diesel and kerosene.
The new direct-purchase model will encourage competition and could help stabilise supply chains amid ongoing fuel price discussions.
In September, Devakumar Edwin, Vice President at Dangote Industries, noted that the refinery, with a capacity of 650,000 barrels per day, had begun processing petrol, initially with NNPC as its sole buyer.
The updated policy now allows other marketers to directly engage with Dangote.
An NNPC official commented, “We can no longer continue to bear that burden,” citing the financial strain of the subsidy system.
Previously, NNPC had purchased petrol from Dangote at N898.78 per litre and sold it to marketers at a subsidised rate of N765.
News About Nigeria reported that in response to claims by the Muslim Rights Concern (MURIC) alleging NNPC’s monopolistic control of Dangote’s petrol products, NNPC released a statement refuting the accusation.
According to Chief Corporate Communications Manager Olufemi Soneye, the pricing of petroleum products is influenced by global market dynamics rather than NNPC’s control.
The company clarified it would only purchase from Dangote when global prices exceed local pump prices.
Additionally, NNPC said that while it has a huge financial stake in the Dangote Refinery, valued at up to $1 billion, it fully supports a competitive market.
