Oil marketers in Nigeria may begin importing petrol as discussions between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Petroleum Refinery continue to stall. This comes after NNPCL stated that it would only purchase petrol from the Dangote refinery if the market price was higher than the pump prices in Nigeria. The NNPCL also clarified that domestic refineries, including Dangote’s, are free to sell to any marketer on a willing buyer, willing seller basis, signaling a shift towards a competitive free market.
This statement contradicts an earlier claim by Dangote Group President, Aliko Dangote, who mentioned that NNPCL would be the sole buyer of petrol from his $20 billion refinery. Dangote had previously stated that the refinery was waiting for NNPCL to offtake its petrol for domestic distribution.
Oil marketers, reacting to the uncertainty, said they would source petrol from the cheapest option, whether through local purchase or imports. Mustapha Zarma, National Operations Controller for the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that marketers were assessing the competitiveness of Dangote’s pricing and would consider importing petrol if it proved more cost-effective. He emphasized that a free market would encourage competition, ultimately benefiting consumers.
Zarma added that with NNPCL’s announcement, it was clear that the government would not subsidize petrol from the Dangote refinery, allowing marketers to explore cheaper alternatives. Similar practices are already in place for diesel, where marketers source from both imports and local refineries, including Dangote’s.
Industry experts believe the Nigerian government is reluctant to halt petrol imports, especially with NNPCL continuing to handle the country’s petrol needs. Despite Dangote’s plan to end fuel importation with the launch of his refinery, NNPCL’s recent stance suggests that fuel imports may continue for some time.
The NNPCL had previously revealed that it spent over N7.8 trillion subsidizing petrol imports in the first seven months of 2024. With official pump prices around N600 per litre and landing costs estimated at N1,200 per litre, NNPCL has been covering significant cost discrepancies.
Further complicating the situation, IPMAN National Publicity Secretary, Ukadike Chinedu, highlighted that marketers would favor whichever source offered a lower price, whether NNPCL or Dangote. He noted that the recent removal of subsidies and the implementation of the Petroleum Industry Act meant that petrol prices would now be dictated by market forces.
Meanwhile, President Bola Tinubu recently directed NNPCL to sell crude oil to Dangote and other domestic refineries in naira, aiming to reduce Nigeria’s foreign exchange burden. This policy is expected to save the country an estimated $7.3 billion annually.
Despite these developments, fuel importation may persist until the Dangote refinery and other local facilities can meet domestic demand, with NNPCL asserting that it would not act as the sole distributor for any refinery.
