The Nigerian National Petroleum Company Limited (NNPC Ltd) has raised petrol prices to a jaw-dropping N1,030 per litre at various fuel stations across the country, sending shockwaves through the economy and sparking outrage among motorists and commuters.
This shocking decision to end its exclusive purchase agreement with Dangote Refinery, effectively opening the market to other players. The move marks a significant shift in Nigeria's fuel distribution landscape, as marketers can now buy directly from the Dangote Refinery, rather than relying solely on NNPC as the sole off-taker. Under the new arrangement, marketers and the refinery will operate on a "willing buyer, willing seller" basis, reflecting the full deregulation of the downstream sector.
On Wednesday morning, NNPC Ltd outlets in Abuja's Central Area stunned customers as the pump price leapt from N897 to a staggering N1,030 per litre. The situation was similar at other outlets in Wuse and Lugbe, where long queues formed, and motorists could be seen venting their frustrations.
The increase is the latest blow to Nigerians already grappling with a worsening cost of living crisis. Commuters and transport operators across the capital city are now facing skyrocketing costs, with many fearing this could trigger an inflationary spiral.
The NNPC previously claimed in September that it was purchasing petrol from Dangote Refinery at N898.78 per litre and selling it to marketers at N765.99 per litre, shouldering a subsidy of N133 per litre. However, this subsidy arrangement has now been scrapped, with NNPC saying it was no longer sustainable.
In recent weeks, the NNPC lifted approximately 103 million litres of petrol from Dangote Refinery between September 15 and 30, during which 2,207 trucks out of 3,621 sent to the refinery were loaded. With this new market dynamic, the NNPC has signaled that prices will now be determined by market forces, potentially driving even higher costs for Nigerians.
