Fuel price climbs to N1,030 Per Litre as NNPCL terminates exclusive refinery purchase agreement

Business a.m.

The Nigerian National Petroleum Company Limited (NNPC) has recently raised the pump price of petrol to N1,030 per litre in various outlets across the nation’s capital, Abuja, according to reports on Wednesday.

In a recent turn of events, the NNPC has taken the decision to end its exclusive purchase agreement with Dangote Refinery, Business a.m. learnt.

The termination of the agreement, aimed at securing refined products from the Dangote Refinery, seems to have precipitated the recent price hike, signalling potential shifts in Nigeria fuel supply, with potential implications for consumers and businesses alike.

According to reports, NNPC had on Monday ended the initial agreement, paving the way for other marketers to directly purchase petrol from the refinery. With this, NNPC is no longer the sole off-taker as marketers are now free to negotiate prices directly with the Dangote Refinery.

The termination of NNPC’s exclusive purchase agreement with Dangote Refinery seems to be in line with the current practices of a fully deregulated fuel market, where refineries can sell to marketers on a “willing buyer, willing seller” basis.

This change comes just a month after NNPC had previously increased the PMS pump price to N855 per litre in Lagos and N897 per litre in Abuja.

In a recent statement, NNPC reported that it was purchasing petrol from Dangote Refinery at a cost of N898.78 per litre and selling to marketers at a significantly lower price of N765.99 per litre, effectively shouldering a subsidy of almost N133 per liter.

However, NNPC maintained that this arrangement was not sustainable and cited the significant costs associated with it as a primary reason for terminating the exclusive purchase agreement.