The Nigerian National Petroleum Company Limited (NNPC Ltd) has estimated N950 as the Lagos selling price of petrol sourced from Dangote refinery. This indicates that the selling price at NNPC’s retail stations in other states will be higher as transport costs would be factored in.

The state oil firm disclosed this in an early Monday statement by its spokesperson, Olufemi Soneye.

“Attached to this statement are the estimated pump prices of PMS (obtained from the Dangote Refinery) across NNPC Retail Stations in the country, based on September 2024 pricing,” the statement said.

The statement shows that NNPC Ltd said it paid Dangote refinery N898.78 per litre for the product, NMDPRA (downstream regulator) fee is N8.99, ‘Inspection fee’ is N0.97, ‘Distribution Cost (Lagos)’ is N15, while ‘Margin’, which can be described as NNPC’s profit on each litre, is N26.48.

“Estimated Pump Price in Lagos” is N950.22, the document states.

The estimated pump price for Lagos at NNPC stations is higher than the current pump price at NNPC stations in the commercial city, which is less than N900. The prices are higher at NNPC retail outlets in other states.

Since NNPC is the sole buyer of petrol from Dangote refinery and is expected to sell the product to other marketers, it indicates that the marketers would buy from the NNPC at about the N950 new price.

Already, many independent marketers across Nigeria sell the product above N1,000 per litre.

Before the commencement of petrol production by the Dangote refinery and its sale to NNPC, which began on Sunday, virtually all of Nigeria’s petrol was imported by the NNPC and then sold to other marketers.

This put a strain on Nigeria’s forex and contributed to the depreciation of the naira.

The petrol import was also not transparent amidst allegations of fraud and importation of substandard products.

In its Monday statement, NNPC suggested that it plans to be transparent about the purchase and sale of petrol sourced from the Dangote refinery.

In the meantime, NNPC would still need to import some petrol to augment the volume produced by the Dangote refinery.

However, the Dangote refinery, owned by Africa’s richest man, Aliko Dangote, is expected to eventually produce enough petrol for Nigeria’s local consumption.

Oil and gas experts told PREMIUM TIMES that Nigerians should not expect the price of petrol to be lower just because it is refined in the country, as market forces would still determine the price.

September payment in dollars

In its statement, NNPC Ltd confirmed an earlier statement by Dangote refinery that it is paying the refinery in dollars for September, as Naira transactions will only commence on 1 October.

“The NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by the government, but negotiated directly between parties on an arm’s length.

“The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on 1st October 2024.” Mr Soneye wrote.

This indicates that NNPC Ltd paid the dollar equivalent of N898.78 for each litre to Dangote Refinery.

However, as directed by President Bola Tinubu, the purchase will be made in naira from October, the same as the sale of crude to Dangote.

NNPC Ltd also insisted on its purchase price following an earlier rebuttal by Dangote refinery that the N898.78 stated by NNPC is “misleading and mischievous.”

The NNPC Ltd assured that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100 per cent to the general public.