The Nigerian National Petroleum Corporation (NNPC) has formally unveiled a new fuel pump price, which is directly linked to the cost of refined petroleum products supplied by the Dangote Refinery, the largest refinery in Africa. This marks a significant development in Nigeria’s energy sector, as it aligns the domestic fuel pricing structure with local production costs, rather than relying solely on imported refined fuel.
This announcement follows Dangote Refinery’s denial of fuel sales at N898 per litre, a rumor that surfaced after the delivery of the first batch of refined fuel to the domestic market. The Dangote Refinery, recently commissioned as Africa’s largest, has now begun contributing to the Nigerian fuel supply chain, providing a localized source of refined petroleum products. This is expected to gradually reduce the country’s dependence on fuel imports.
According to the NNPC, the newly introduced pump price is part of a carefully formulated strategic pricing mechanism. This pricing model is designed to reflect the cost of production at the Dangote Refinery, while also taking into account prevailing global oil market trends and logistics costs. The NNPC emphasized that this approach aims to create a fair and sustainable pricing environment for both producers and consumers in the Nigerian market.
Although the specific price has not yet been publicly disclosed, industry analysts are predicting a more stable pricing landscape, especially in contrast to the volatility experienced in recent months due to the removal of fuel subsidies. The Nigerian government’s decision to eliminate fuel subsidies has led to price fluctuations, but with local refining capacity increasing, there is hope that fuel prices will stabilize over time.
In an official statement, the NNPC explained that the pricing mechanism for fuel is designed to ensure the long-term sustainability of the fuel supply chain while aiming to minimize the impact of price changes on Nigerian consumers. By reflecting the true cost of production and market realities, the NNPC hopes to establish a more transparent and predictable pricing model.
NNPC’s Press Release on New Estimated Pump Price
“NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery, Based on September 2024 Pricing
The NNPC Ltd has released the estimated prices of Premium Motor Spirit (PMS), commonly referred to as petrol, obtained from the Dangote Refinery, which will be sold at NNPC retail stations across the country. These prices are based on September 2024 pricing and will be reflected in the corporation’s outlets nationwide.
Furthermore, the NNPC Ltd would like to clarify that, in accordance with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by the government. Instead, they are negotiated directly between parties on an arm’s-length basis, ensuring fairness and market-driven pricing without undue government interference.
The NNPC Ltd can confirm that it is currently paying the Dangote Refinery in U.S. dollars for the September 2024 PMS offtake. However, from October 1st, 2024, all transactions between the NNPC and the Dangote Refinery will be conducted in Nigerian Naira, as part of the efforts to support local currency usage and strengthen the national economy.
Additionally, the NNPC Ltd assures the Nigerian public that if the quoted pricing from the Dangote Refinery is ever disputed or reviewed downward, any discounts obtained will be passed on entirely to consumers, without exception. This ensures that Nigerians will benefit directly from any favorable adjustments in pricing.
Attached to this statement are the estimated pump prices of PMS, sourced from the Dangote Refinery, at NNPC Retail Stations across the country, based on the pricing structure for September 2024.
Olufemi SoneyeChief Corporate Communications OfficerNNPC LtdAbuja
16th September, 2024.”
