On October 7, Nigerians came into an era they had looked forward to, a lowered monopoly of the NNPC in the distribution of the Dangote Refinery petrol. Now, the independent marketers can buy petrol directly from the refinery.
This move introduces more competition and flexibility in Nigeria’s oil market, breaking the NNPC’s former monopoly.
Indeed, the October 7 decision was a significant change.
The Nigerian National Petroleum Company Limited (NNPC) ended its exclusive agreement with Dangote Refinery to buy petrol.
This marks a turning point, as independent marketers can now buy directly from the refinery, creating more competition and flexibility in pricing.
Previously, the NNPC was the sole buyer of petrol from the Dangote Refinery, which has the capacity to process 650,000 barrels of oil per day.
But with this new move, the market will now follow a more open, deregulated system.
Independent marketers will be able to negotiate prices directly with the refinery, bringing a fresh approach to the oil sector.
Initially, Dangote Industries had stated that NNPC would be the refinery’s only customer.
NNPC Expands Petrol Access
However, NNPC later clarified that other marketers would also have access to buy petrol.
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This decision came after the House of Representatives urged the government to ensure that independent marketers were not left out of the supply chain.
The main goal of this change is to boost competition and prevent monopolies, which is expected to drive prices down for consumers.
Lawmakers were concerned that limiting petrol sales to a selected few would harm the market.
Now that NNPC is no longer the sole buyer, petrol prices will likely fluctuate according to market forces.
As a result, marketers will have to source their petrol based on market prices.
With retailers setting their own prices depending on Dangote’s selling price, there could be more variation in petrol costs moving forward.
This shift signals the beginning of a more open and competitive fuel market in Nigeria.