Nigerians are bracing for an obvious unavoidable petrol pump price review across the country following the end of the exclusive purchase agreement between the Nigerian National Petroleum Company Limited (NNPC Ltd) and Dangote Refinery,
The update was given by Premium Times who describes the development as a fallout of the termination of the trade agreement. The story said that as the significant policy shift unfolds, new pricing data reveals that the cost of petrol at retail outlets across the country is expected to climb to a staggering minimum of ₦991.21 per litre, up from the current ₦897/litre
In Abuja, petrol could soar to as high as ₦1,029.01 per litre, while Lagos residents may pay ₦991.21.
Other cities are also expected to experience sharp increases, with prices reaching ₦1,040.31 in Kano, ₦1,007.35 in Calabar, ₦1,045.72 in Sokoto, and ₦1,059.39 in Maiduguri. Additionally, petrol in Ibadan may cost ₦999.27, and in Enugu, it could rise to ₦1,022.63.
The decision by NNPC Ltd to end its exclusive agreement with Dangote Refinery opens the market for other marketers to directly purchase petrol, allowing them to negotiate prices independently.
The move aligns with the trend towards deregulation in Nigeria’s petroleum sector, where refineries are now able to engage with marketers on a “willing buyer, willing seller” basis.
NMDPRA’s documentation highlights the subsidy payment differentials previously covered by NNPC, illustrating the potential impact on consumers as these subsidies are withdrawn.
The recent PMS data, which reflects trading averages from September 23 to October 4, 2024, shows that the NNPC was subsidizing petrol by an average of ₦134.5 per litre across the eight cities analyzed.
In all the cities the document referred to, the average NAFEM FX rate used to calculate the pump price was ₦1,604.89/USD.
In Lagos State, the indicative pump price is ₦991.21, while the actual NNPC pump price is ₦855 per litre. This indicates that NNPC pays about ₦136.21 as its estimated differential price.
In Abuja, the indicative pump price is ₦1,029.01 while the actual pump price is ₦897 per litre, meaning that the NNPC pays about ₦132.01 as an estimated differential.
In Kano, the indicative pump price is ₦1,040.31 per litre, while the actual pump price is ₦904, indicating an estimated differential price of ₦136.31.
In Calabar, the indicative pump price is ₦1,007.35; the actual pump price is ₦885 per litre, and the estimated differential price is ₦122.35.
In Sokoto, the indicative pump price is ₦1,045.72 per litre, while the actual pump price is ₦904, indicating an estimated differential of ₦141.72.
Maiduguri, the indicative pump price is ₦1,059.39, while the actual pump price is ₦924, indicating an estimated differential of ₦135.39.
In Ibadan, the indicative pump price is ₦999.27 per litre while the actual pump price is ₦865, and the estimated differential price is ₦134.27.
Enugu’s indicative pump price is ₦1,022.63, the actual pump price is ₦885 per litre, and the estimated differential price is ₦137.63.
Premium Times on Monday quotes some reports as saying that the pump price may even be higher than estimated, depending on crude oil prices and prevailing foreign exchange rates.