As the landing price undergoes a significant revision, Nigerians will face a new petrol pump price across the country.

Dangote Refinery has made a significant announcement regarding its pricing strategy by deciding to cease the sale of petroleum products in Nigerian naira.

As a major player in the oil and gas sector, this decision may have wider implications for the market, including fluctuations in fuel prices and impacts on consumers and businesses reliant on stable petroleum costs. Continue Reading.

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The price of importing premium motor spirit, commonly referred to as petrol, into Nigeria has risen to N885 per litre, an increase from the N797 per litre recorded just last week.

The Major Energy Marketers Association of Nigeria (MEMAN) confirmed this rise in its daily energy bulletin released on Wednesday. This marks an increase of N88 per litre within a week.

With this increase, petrol prices at filling stations may soon go beyond N1,000 per litre, up from the current range of N940 to N970 per litre.

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Currently, the landing cost of petrol stands at N797 per litre, while Dangote Refinery’s ex-depot price is N815 per litre. This has resulted in retail prices at MRS filling stations in Lagos and Abuja ranging from N860 to N880 per litre.

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The Nigerian National Petroleum Company Limited has made a reduction to its ex-depot price of Premium Motor Spirit, commonly known as petrol, decreasing it from N1,020 to N899 per liter.

This decision, coming days after the Dangote Refinery reduced its price to N899, was confirmed by the Petroleum Products Retail Outlets Owners Association of Nigeria in a statement released on Saturday.

The statement signed by the association’s National Public Relations Officer, Dr Joseph Obele, and quoting a document released by NNPCL’s Commercial Department indicates a reduction based on the regional pricing scheme.

The price indicated that marketers would buy the product at N899 per litre, matching the price offered by the Dangote refinery a few days ago.

Marketers purchasing from Warri, Oghara, Port Harcourt and Calabar will, however, pay N970 per litre to offtake products.

The statement read, “The Nigerian National Petroleum Company Limited has taken a significant step in response to the competitive impact of deregulation in the downstream sector.

“The company recently reduced the ex-depot price of Premium Motor Spirit from N1,020 to N899 per litre.

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“The price reduction by NNPCL is seen as a response to the competitive impact of deregulation, which has led to increased competition in the downstream sector.”

Obele noted that the price reduction by the national oil firm is seen as a response to the competitive impact of deregulation, which has led to increased competition in the downstream sector.

He also expressed optimism that PMS prices will drop further before the end of January 2025, given the global decline in crude oil prices and the naira’s recent gain against the dollar.

Obele described the trend as a price war while he emphasized that the price reduction by Dangote Refinery and NNPCL demonstrates the benefits of competition and advocates for the immediate privatization of government-owned refineries.

The move is expected to spark a price war among oil marketers, ultimately benefiting consumers.

However, the NNPCL spokesperson, Femi Soneye, is yet to confirm this development.

Reacting to this development, the National President of PETROAN, Billy Harry, said the price reduction is a welcome development that will bring relief to motorists and Nigerians during the holiday season.

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He said, “The reduction in PMS price by NNPCL is a demonstration of the company’s commitment to making petroleum products more affordable for Nigerians.

“We commend NNPCL for responding to our call for affordable PMS prices.”

He also listed the benefits of the price reduction to consumers, including “Reduced transportation costs: With lower PMS prices, motorists will spend less on fuel, leading to increased disposable income.

“Increased economic activity: Lower fuel prices will stimulate economic growth by reducing production costs and increasing demand for goods and services.

“Improved standard of living: The price reduction will lead to a decrease in the cost of living, enabling Nigerians to afford necessities and enjoy a better quality of life.”

Harry also commended Dangote Refinery for its earlier price reduction, which he said had helped to stimulate competition in the downstream sector.

The PETROAN national official also hinted at a report submitted by PETROAN’s technical pricing team, warning that competitive pricing can lead to compromised product quality.

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He further urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority to ensure compliance with quality assurance standards.

“PETROAN is calling on the Nigerian Midstream and Downstream Petroleum Regulatory Authority to ensure compliance with quality assurance standards which may arise due to competitive pricing,” he added.

Heineken Lokpobiri, minister of state for petroleum resources (oil), says Nigeria will conform with the production quota set by the Organisation of Petroleum Exporting Countries (OPEC).

On June 2, OPEC extended Nigeria’s production quota of 1.5 million barrels of crude per day (bpd) to 2025.

OPEC said Nigeria should maintain the production level till December 31, 2025.

The oil cartel increased Nigeria’s production level to 1.5 million bpd for 2024 at its ministerial meeting on November 30, 2023.

However, Nigeria has been producing below the quota.

Speaking after OPEC’s 56th joint ministerial monitoring committee (JMMC) on October 2, the minister said Nigeria remains fully committed to the objectives of the body’s declaration of cooperation (DoC).

“Nigeria remains fully committed to the objectives of the DoC, and I can confidently confirm that our country is in conformity with the agreed production limits,” he said.

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“While we continue to ramp up production in line with our national interests, we are doing so within the framework of OPEC’s guidelines, as we remain committed to balancing responsible production with our economic goals, and continue to meet our obligations under the DoC.”

OPEC RETAINS PRODUCTION OUTPUT POLICY

At the meeting, the oil cartel and its allies, known as OPEC+, retained its oil output policy, including a plan to start raising output in December.

According to a statement by OPEC, the group reviewed the crude oil production data for the months of July and August 2024 as well as current market conditions.

“During the meeting, the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation confirmed that they had achieved full conformity and compensation according to the schedules submitted for September,” the oil cartel said.

OPEC said the three countries reiterated their resolve to maintain full conformity and compensation throughout the remaining period of the agreement.

Final estimates of September’s crude oil production levels, according to the oil cartel, would be based on authorised secondary sources that would be accessible by the second week of October.

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The oil alliance added that it will provide production figures for the nations that are part of the declaration of cooperation (DoC).

“The committee noted the three separate technical workshops between representatives from the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation and the secondary sources,” OPEC said.

“The meeting was aimed at discussing September production details and submitting their revised compensation plans that include the August overproduction as per the submitted plans to the OPEC Secretariat while also emphasising the need for some members to make further cuts to compensate for overproduction.

“The JMMC emphasised the critical importance of achieving full conformity and compensation. It will continue to monitor adherence to the production adjustments agreed upon at the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM) held on 2 June 2024.

“The Committee will also continue to monitor the additional voluntary production adjustments announced by some participating OPEC and non OPEC countries as agreed upon in the 52nd JMMC held on 1 February 2024.”

Furthermore, according to OPEC, the committee would continuously assess market conditions.

OPEC said the next meeting of the JMMC is scheduled for December 1, 2024.

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Petroleum marketers have raised an alarm that the Nigerian National Petroleum Company Limited, NNPCL, portal used for the purchase of Premium Motor Spirit (Petrol) has been shut down against dealers, making it impossible to apply for the commodity.

The spokesperson of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike disclosed this in a statement on Wednesday.

According to him, marketers have more than 2,000 pending tickets for the purchasing of 45,000 liters of petrol.

He hinted that the situation may lead to another round of fuel scarcity nationwide.

“I can’t confirm the price now because the portal is still shut down.

“We have more than 2,000 tickets for 45,000 liters (of petrol). That is 45,000 multiplied by 2,000, you can now know the number of million liters it will be. This is just an estimate, you know I don’t work with NNPCL and I don’t know what is on their system,” Ukadike stated.

He added that a 45,000-litre truckload of PMS is around N39.5 million, making N79 billion when multiplied by 2,000.

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Reacting to the development, the spokesperson of NNPCL, Olufemi Soneye admitted that the state-owned firm has a significant backlog to address.

He said that the portal closure was intended to prevent the company from holding marketers’ funds for an extended period.

Soneye assured that the portal would soon be reopened; however, he failed to state the date when it would happen.

“We have a significant backlog to address. The closure is intended to prevent us from holding marketers’ funds for an extended period,” Soneye had explained.

“It will be reopened once the backlog has been sufficiently reduced. We are working to address it as soon as possible,” he stated.

The development comes as Nigerians struggle with high energy costs.

Recall that NNPCL in September 2024 announced a fresh price increase for petrol nationwide after lifting the product from Dangote Refinery.

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Nigerians currently buy petrol between N950 and N1,100 per liter nationwide.

The import of Automotive Gas Oil (Diesel) into Nigeria increased by 22.66 percent to 4.94 billion liters in 2023 from 4 billion liters in 2022.

The National Bureau of Statistics disclosed this in its latest Petroleum Products Distribution Data released recently.

The data also showed that 109.39 million liters of Diesel were locally produced in 2023, compared to 102.47 million liters reported in 2022.

This represents a 6.76 percent growth rate in locally produced diesel in Nigeria.

Comparatively, Nigeria heavily depends on the import of diesel to meet its consumption demand based on the NBS data for 2023.

On the other hand, the Data also showed that the import of Premium Motor Spirit (petrol) dropped 13.77 percent to 20.30 billion liters in 2023 compared to 23.54 billion liters in 2022.

Recall that in April 2024, Dangote Refinery commenced the domestic sale of diesel in Nigeria.

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The Nigerian National Petroleum Company (NNPC) is prioritising supplying naira-denominated crude oil to the Dangote Refinery in the first phase of a naira-for-crude scheme, a development expected to positively impact the domestic fuel supply chain and enhance transparency.

Oil transactions in Nigeria are often conducted in US dollars, given the international nature of the oil market and the global reliance on the dollar for such trade.

However, the Federal Executive Council recently adopted a proposal by President Bola Tinubu to sell crude to Dangote refinery and other upcoming refineries in naira.

The federal cabinet approved that the 450,000 barrels meant for domestic consumption be offered in naira to Nigerian refineries, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction.

Eche Idoko, publicity secretary of CORAN said the federal government had promised to only supply crude oil to the Dangote refinery as it was the “only refinery producing petrol”.

“We were present at the inaugural meeting where the federal government did make us understand that they would want to start the naira sales in phases. That they would start with refineries that are producing PMS first and extend it to other refineries and that’s where they are right now and we can say the first phase of the naira sales will start in October,” Idoko said.

“No other refinery (apart from Dangote refinery) is selling petrol at the moment but I know that there are other refineries working on their plants that would be producing petroleum like the Clairgold refinery which intends to produce PMS.

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“There is also Aradel which is working on their PMS plant. There is also Azikel Petroleum Refineries, which is also working on producing PMS.

“The last I heard with respect to that arrangement, the October date still remains and we have spoken with people at Dangote and they said conversations are ongoing.”

However, he said the details of the transactions would be made known when the federal government makes the announcement.

“For instance, are they going to discounts as in the normal practice when you are selling crude to the international traders? If there is going to be a discount, that is what will guarantee the reduction in price of petroleum products,” Idoko said.

“We also want to know at what rate is the exchange rate pegged. Is the federal government intending to maintain the N1,600 exchange rate?”

He said Nigerians would know the potential price of petroleum products when all the details are unveiled.

On September 13, 2024, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency announced that the Federal Executive Council under the leadership of President Bola Tinubu approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.

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“From October 1, NNPC will commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery to be paid for in naira,” the committee had declared.

The chairman of the Technical Sub-Committee is Zacch Adedeji, who doubles as chairman of the Federal Inland Revenue Service.

Dare Adekanmbi, the special adviser on media to the FIRS Chairman told Journalists that the committee is working day and night to ensure that things go according to plans.

The panel explained in September that this initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.

“Since then, the implementation committee chaired by the Minister of Finance and we, the technical committee, have worked intensely with NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the FEC approval,” Adedeji had stated.

While stating that crude would be sold to Dangote in naira from October 1, the committee chairman and FIRS boss said, “In return, the Dangote refinery will supply PMS (petrol) and diesel of equivalent value to the domestic market to be paid in naira.

“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.”

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Adedeji explained that the technical committee that worked to flesh out the initiative would transition to an implementation execution and monitoring committee working out of Lagos for the next three to six months.

The committee, which includes Lydia Jafiya; the permanent secretary of the Federal Ministry of Finance; the FIRS boss, as well as representatives from NNPC, Central Bank of Nigeria, AfreximBank, and the Nigerian Upstream Petroleum Regulatory Commission, was set up to craft a robust template that will ensure the successful implementation of the initiative.