NNPC Terminates Exclusive Petrol Supply Deal With Dangote Refinery, Opens Market To Other Players

NNPC Terminates Exclusive Petrol Supply Deal With Dangote Refinery, Opens Market To Other PlayersThe Nigerian National Petroleum Company Limited (NNPC) has officially ended its exclusive purchase agreement with Dangote Refinery, allowing other petroleum marketers to buy petrol directly from the refinery. According to PREMIUM TIMES, this move opens up the market, enabling marketers to negotiate prices with Dangote on a “willing buyer, willing seller” basis, marking a significant shift in the industry.

Previously, the NNPC was the sole purchaser of petrol from the refinery. However, with this change, the market will now operate similarly to other deregulated products in Nigeria, such as diesel, aviation fuel, and kerosene, which are already traded openly.

Dangote Refinery, with a production capacity of 650,000 barrels per day, began operations in September. Initially, its Vice President, Devakumar Edwin, stated that the NNPC would exclusively purchase petrol from the refinery. However, the NNPC has now clarified that the refinery is free to sell to any marketer, ending the exclusive agreement.

On September 15, the NNPC began loading petrol from Dangote Refinery but restricted access to major marketers, excluding independent marketers. In response, Nigeria’s House of Representatives urged the government to direct the NNPC and Dangote Refinery to allow independent marketers access to the product. Lawmaker Oboku Oforji warned that excluding these marketers could create monopolistic practices, forcing some to resort to importing fuel to remain competitive.

Sources confirmed that the NNPC plans to step down as the sole purchaser, allowing all marketers direct access to Dangote’s petrol. This change is expected to foster competitive pricing and stabilize supply chains. While the NNPC did not provide an official comment, an internal source confirmed the move, stating, “Yes, it is true. We can no longer continue to bear that burden.”

In September, NNPC purchased petrol from Dangote at ₦898.78 per litre but resold it to marketers at ₦765.99 per litre, absorbing a subsidy of ₦133 per litre. During this time, the NNPC lifted around 103 million litres from the refinery, although only 26% of scheduled trucks were loaded.

The NNPC’s exit from its exclusive buyer role signals a shift toward a fully liberalized fuel market in Nigeria, potentially leading to the end of petrol subsidies. Marketers will now set their own prices based on direct purchases from Dangote, which could result in higher fuel prices for consumers. Additionally, broader access to the refinery’s petrol might encourage investment in distribution infrastructure, improving supply stability across the country.

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