By Major oil marketers will soon start purchasing Premium Motor Spirit (PMS), commonly known as petrol, directly from the Dangote Petroleum Refinery between Thursday and next week. This follows the Nigerian National Petroleum Company Limited’s (NNPCL) decision to step down as the sole off-taker of petrol from the $20bn refinery. Sources from NNPCL and the Major Oil Marketers Association of Nigeria (MOMAN) confirmed this, allowing other players in the downstream sector to buy petrol directly from the Dangote refinery.
There are also unconfirmed reports that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued new petrol prices, which are expected to be higher than current pump prices. However, NMDPRA spokesperson George Ene-Ita has neither confirmed nor responded to these reports.
Oil marketers explained that NNPCL’s move marks the complete end of petrol subsidies, which were previously costing the government N3.3bn daily. On September 25, The PUNCH reported that the Federal Government might have spent about N236bn monthly to subsidize petrol imported or off-taken by NNPCL from the Dangote refinery. By stepping down as the sole off-taker, NNPCL is expected to save this amount.
Previously, the Federal Government announced that crude oil would be sold to Dangote in naira starting October 1, with PMS and diesel supplied to the domestic market in return. While marketers have not yet started purchasing directly from the Dangote refinery, it has been confirmed that NNPCL is no longer the sole off-taker. A major oil marketer stated that this decision signifies the end of subsidized petrol purchases, though dealers have not yet reviewed their prices as they await Dangote’s pricing announcement.
Another official from MOMAN confirmed that while major marketers were still buying through NNPCL as recently as late September, a shift to direct purchases from Dangote is expected soon. Prices are likely to increase, with reports suggesting that indicative pump prices could rise in various cities. For instance, in Abuja, the pump price could reach N1,029.01 per litre, up from the current N897.
Though the NMDPRA has not confirmed these new prices, oil marketers believe that the removal of the subsidy will inevitably lead to higher petrol costs. Ukadike Chinedu, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, urged Nigerians to brace for the price increase, while expressing hope that selling crude in naira might have a positive impact.
