Oil & Gas
Why NNPC may not lift Dangote petrol on Sunday
Four days before the September 15, 2024, date announced by the Nigerian National Petroleum Company Limited to start lifting Premium Motor Spirit, popularly called petrol, from the Dangote Refinery, investigations by The PUNCH show that no commercial agreement has been reached to that effect by both parties.
Multiple sources from NNPC and Dangote confirmed on Tuesday that the two oil firms had yet to reach a deal on the quantity and pricing of PMS to be lifted by the national oil company.
On September 5, 2024, the Executive Vice President of Downstream, NNPC, Adedapo Segun, said during a live television programme that the company would lift Dangote petrol on September 15.
He also outlined factors that would determine the price of the commodity, as he stated that foreign exchange rates and market forces would influence the cost of petrol, stressing that the market had been deregulated.
But on Tuesday, government sources close to the development revealed that no paperwork had been signed by both parties for the lifting of petrol from the $20bn Dangote refinery by NNPC from September 15.
They stated that the terms and conditions required for the deal had not been agreed on, stressing that the national oil company may not lift any petrol from Dangote on the announced date.
When told that September 15, 2024, is around the corner and asked whether plans had been concluded for NNPC to lift Dangote petrol from that day, a senior official at Dangote refinery, who spoke to one of our correspondents in confidence due to lack of authorisation to speak on the matter, said nothing had been agreed on pricing, and petrol lifting, among other things.
“Right now, no documentation from NNPC and NMDPRA (Nigerian Midstream and Downstream Petroleum Regulatory Authority) on product lifting. Nobody has spoken to us that they want to pick up PMS on September 15.
“For you to come and pick products in five days there must be discussions on pricing and other things, which is the commercial engagement. Of course, there must be an offer and other things, the lawyers will structure the terms and conditions,” the source stated.
On how PMS lifting from the Dangote refinery could be, the official replied, “It will be through the same way that products are imported and put in terminals before being lifted by marketers for distribution across the country.”
Another official at the Federal Minister of Petroleum Resources, corroborated the position of the Dangote source, stating that “nothing concrete has been agreed on right now in terms of petrol lifting, but I believe the process is still ongoing.”
A seasoned business adviser to several companies in the upstream, midstream, and downstream oil and gas sectors in Nigeria, Mr Dan Kunle, urged President Bola Tinubu to intervene in the matter.
“The President must act now to address the concerns caused by the issues surrounding the supply of petrol and how this has been fueling the socioeconomic crisis across the country,” he advised.
The spokesperson for the NNPC, Olufemi Soneye, had yet to respond to enquiries on the matter up till when this report was filed on Tuesday night.
Refiners react
Also on Tuesday, the Crude Oil Refiners Association of Nigeria said the Dangote refinery petrol might be cheaper if it gets the necessary concessions from the Federal Government.
CORAN’s comment is coming amid fears that the Dangote petrol may be more expensive when released into the market.
The PUNCH reports that the refinery has yet to roll out its petrol a week after it was unveiled by the President of the Dangote Group, Aliko Dangote.
Marketers had expressed fears that the product from the Dangote refinery may be as high as N1,000/litre considering the current landing cost of petrol.
However, speaking in an interview with our correspondent on Tuesday, CORAN Publicity Secretary, Eche Idoko, disclosed that there is no way Dangote’s PMS will be more expensive if the government fulfils its promises.
While saying he was not in a position to determine the price, he stated, “There’s no way his fuel will be too expensive if all the other concessions the government has arranged come to bear. So, if those come to bear, definitely his prices will be cheaper.
“The only thing that will make his products more expensive is if he gets the crude on a higher term. That was all we were crying out for the first time. We must have a special pricing arrangement for local refining like it’s done in other places,” he suggested.
The CORAN spokesman advocated that the committee set up by the Federal Government on naira crude sale to local refineries should come up with a report, while the Nigerian Midstream and Downstream Petroleum Regulatory Authority will guide on prices.
He also requested, “For those of us who are local refiners, we must be able to create a special pricing arrangement for both feedstock and the refined product that will satisfy the Nigerian people.”
The position of the association, he said, is to make sure members break even in business while producing the quality specification that best serves Nigerians and delivering it at a reasonable price that will satisfy Nigerians.
He told our correspondent that the group was planning to meet with Dangote on pricing.
“By the time we interact with Dangote on his pricing arrangement, we will be able to address him where we deem it necessary and then we will also come out and publicly address the press on that. At this instance, we are yet to do that,” he said.
On the back and forth between the Dangote refinery and the Nigerian National Petroleum Company Limited, Idoko said refiners were not surprised.
“We are not surprised at what is happening. Usually, when there is going to be a market shift, the incumbents are bound to react,” he noted.
He stressed that discussions are still ongoing and there is nothing concrete yet.
“Because there is nothing concrete and everything is still based on speculations and bickering from both Dangote and NNPC, we don’t want to take a position until the negotiations are completed, especially with the committee set up by the Federal Government to see to the supply of crude in naira is completed and we are properly briefed, then we can give a position.
“But, by way of summary, our position ultimately will be what would be in the interest of, first, the Nigerian people, and then secondly, we would also throw our weight behind people who are seeking to invest in our economy. Those are the two paramount things.
“We always keep telling the government and telling anybody who cares to listen, that the decisions that have to be reached on local refining shouldn’t be done from the lens of one man alone. Dangote means just one out of many of us.
“So, we want the decision of the government to be palatable to even new entrants. So, in this instance, we want to tell the government to actually look at the broader picture of things and not say, ‘We are doing this because of Dangote’. We are doing it because of new entrants that are coming tomorrow,” he stressed.
According to him, refining locally has its advantage over importing products.
“As Nigerians, we also expect that in the overall pricing, Dangote is going to be circumspect and would look at the interest and purchasing power of Nigerians. Even though we know he’s in the business for gain, we do expect, as the person that he is, that he’s going to look at the interest of Nigerians in arriving at a price.
“We also want to advise NNPC to be very transparent about it and it’s not the time for politics because people are really suffering,” Idoko mentioned.
On the condition of the NNPC that it would only pick Dangote PMS if it is cheaper, Idoko maintained that the intervention of the Federal Government is still being awaited.
“I know if Dangote gets a special arrangement, they will also sell under that special arrangement for that quantity they are going to be refining. So, a lot is still going on right now. And then as an umbrella association, we don’t want to make any statement until we have seen the actual facts.
“But I think whatever you are seeing in the press is the normal thing that happens between the two parties trying to buy. So everything is done to give you a negotiating advantage. And in this case, playing to the people’s sentiments is key.
“But when it comes to pricing, I know that some compromise will be reached sometime, but our position is that whatever the compromise is, it should be in the overriding interest of Nigeria and Nigerians.
“Dangote has not briefed us nor has the committee set up by the Federal Government reverted to us on what had been agreed. We have told them what our intentions are and we have told them w
Nigerian crude remained steady at $73 after a three-day decline, as concerns grew over Russian supply risks, further intensified by US President Donald Trump’s escalating threats to penalize India for purchasing crude from Moscow, as reported by Nairametrics.
Brent fell below $69 a barrel after losing over 6% in the past three sessions, while West Texas Intermediate hovered near $66 a barrel.
U.S President’s comments about “substantially raising” tariffs on exported Indian goods due to Russian oil imports were an attempt to pressure Moscow into complying with a ceasefire concerning the Ukraine conflict, which drew strong opposition from New Delhi.
The US president issued his most recent warning to India just before his deadline of August 8 for Russia to agree to a truce with Ukraine.
Tass stated that Steve Witkoff, the US Special Envoy, is scheduled to travel to Moscow on Wednesday. After Russia’s invasion of Ukraine in 2022, India became the largest purchaser of Russian seaborne crude exports, quickly increasing purchases from nearly zero to roughly one-third of imports while snatching up discounted barrels avoided by Western countries. China is a significant buyer of oil from Moscow as well.
India’s ongoing demand for oil keeps Nigerian barrels in high demand, highlighting the impact of global supply chain shifts and new consumption patterns.
Nigeria’s crude oil production increases
The narrowing delta between Brent and Nigerian crude is a sign of increased market competition. A statement released on Monday by Nigeria’s upstream regulator stated that the country’s oil production averaged 1.8 million barrels per day.
Nigeria relies on increased crude oil production to finance its economy; the black viscous hydrocarbon constitutes over 80% of foreign exchange earnings and nearly two-thirds of government revenue.
Gbenga Komolafe of the Nigerian Upstream Petroleum Regulatory Commission said the output rise is from enhanced security measures and is part of an effort to boost oil production from 1 million to 3 million barrels per day.
Nigeria aims to increase its oil output, with a medium-term target of reaching 2.06 million barrels per day by 2027, according to Bayo Ojulari, CEO of the Nigerian National Petroleum Company (NNPC) Limited. He expressed confidence that by December this year, output could reach 1.9 million barrels per day.
Nigeria achieved full operational capacity on its major crude oil pipelines in June, a milestone Ojulari said was the first in many years and signaled improved system reliability and infrastructure security.
OPEC+ members to increase crude oil output
OPEC+ members’ decision to boost crude output at the start of the next month stems from the ongoing recovery of the global economy and fundamental market factors. Data from the August 3 meeting, which involved Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, showed they reaffirmed their commitment not to destabilize the market.
The phased responsive increase marks the fourth monthly hike in the 2.2 million bpd voluntary production cuts introduced in April and November 2023 in a bid to support prices during highly volatile market conditions.
OPEC explicitly supported the participants and quoted, “By the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from1 April 2025, the eight participating countries will implement a production adjustment of 547 thousand barrels per day in September 2025 from the August 2025 required production level.
” However, industry analysts are increasingly worried that this decision could put downward pressure on oil prices, which would negatively affect Nigeria’s oil revenues.
“Although there is a lot of discussion about tariffs on India, it is clear that there is a possibility that secondary tariffs will also be applied to other buyers,” said Patterson of ING. The more buyers are subject to these tariffs, the more difficult it is for the market to cope with the potential disruption.
If India’s purchases of Russian oil are interrupted, it might have to look for supplies elsewhere. Other OPEC+ countries, those in the Middle East, were able to make up for any potential shortfall, according to a recent note from Rystad Energy. The alliance agreed to start increasing production in September by about 547,000 barrels per day.
The Dangote Petroleum Refinery has once again reduced the depot price of Premium Motor Spirit (PMS), popularly known as petrol, from N838 to N820 per litre, as crude oil prices continue to decline and competition intensifies in Nigeria’s downstream market.
This latest price adjustment – an 18 naira drop – follows a broader trend in the domestic fuel market, triggered by a fall in global crude prices to $70 per barrel, down from over $77 in June 2025. The easing of geopolitical tensions, particularly the ceasefire in the Israel-Iran conflict, has contributed significantly to the dip in crude prices, thereby affecting refined product pricing globally.
Other key operators have also revised their depot prices, albeit marginally, in response to the shifting market dynamics. Data from PetrolPrice.com revealed that while Dangote made the most significant cut, other companies made smaller reductions:
Fatgbems: N837/litre (from N838), Integrated: N836/litre (from N837), Bovas: N836/litre (from N837), AIPEC: N837/litre (from N840) and First Royal: Maintained N838/litre.
In an interview with Vanguard, Olatide Jeremiah, CEO of PetrolPrice.ng, noted: “We are seeing a lot of dynamics in both global and domestic markets. With the ceasefire in the Israel-Iran conflict, crude oil prices have dropped to about $70 per barrel from over $77. Consequently, operators in the domestic market have adjusted accordingly. We look forward to more price changes in the coming weeks.”
This is not the first time Dangote Refinery has responded swiftly to international oil market shifts. In recent weeks, the refinery had cut the gantry price of petrol by 4.5%, bringing it down to N840 from N880 per litre, as oil prices slipped to $67.50 per barrel.
Nigeria’s fuel market has remained volatile in recent months, with petrol prices largely influenced by international crude trends due to the deregulation of the downstream sector. While Dangote’s refinery has played a stabilising role since it began domestic supply, volatility in crude benchmarks like Brent and Nigeria’s Bonny Light – which recently dropped from $80 to $68 per barrel – continues to impact product pricing.
The drop in depot prices may not immediately translate into a corresponding reduction at the pump for motorists due to other cost components like transportation, margins, and taxes. However, the move is expected to ease pressure on marketers and potentially curb further hikes in retail fuel prices, especially in the face of persistent inflation and currency instability.
With Dangote’s massive refining capacity and growing influence in Nigeria’s energy market, its pricing decisions are increasingly becoming benchmarks for others. The continued drop in depot prices could provide a cushion for consumers battling with high transportation and living costs.
Still, analysts warn that unless Nigeria’s forex volatility and logistics challenges are resolved, retail fuel prices will remain vulnerable to global oil market fluctuations. As more refined products hit the market from the Dangote Refinery and as international oil prices stabilise further, stakeholders are optimistic about a more predictable pricing regime in the coming months.
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.
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.
“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.
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.
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.
“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.
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.
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.
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.
Nigerians currently buy petrol between N950 and N1,100 per liter nationwide.
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