The Nigerian National Petroleum Company Limited (NNPC) has officially ended its exclusive purchase agreement with Dangote Refinery, opening the market for other marketers to directly buy petrol from the refinery.
This move signifies that NNPC will no longer act as the sole off-taker, allowing marketers to negotiate prices directly with Dangote Refinery.
The change aligns with the deregulated market practice, where refineries can sell directly to marketers based on a willing buyer, willing seller model.
In September, Devakumar Edwin, Vice President of Dangote Industries Limited, announced that the 650,000 barrels per day Dangote Refinery had begun processing petrol.
Femi Soneye, NNPC’s spokesperson, was unavailable for comment, but a senior official confirmed the development to PREMIUM TIMES on Monday morning. “Yes, it is true,” the official stated. “We can no longer continue to bear that burden.”
Earlier in September, NNPC revealed that it was purchasing petrol from Dangote Refinery at N898.78 per litre and selling it to marketers at N765.99 per litre, absorbing a subsidy of nearly N133 per litre.
Between September 15 and 30, NNPC lifted around 103 million litres of petrol from Dangote Refinery, with the refinery successfully loading 2,207 out of 3,621 trucks sent during that period.
This withdrawal by NNPC as the sole off-taker marks a significant step towards full market liberalisation, enabling marketers to source products directly from Dangote or other suppliers.
Without NNPC covering the price differential between Dangote’s selling price and the price to marketers, subsidies will cease. Marketers will now buy at cost price and sell with their own margin, which may lead to an increase in the product’s final price.
