Dangote's Petrol to Flood Market from Sept 15, Price Determined by Market Forces - NNPCL*

 

In a significant development, the Nigerian National Petroleum Company Limited (NNPCL) has announced that petrol from the Dangote Refinery will begin to flood the market from September 15, 2024. This move follows the commencement of petrol refining by the Dangote Refinery earlier in the week.

According to NNPCL's Chief Corporate Communications Officer, Olufemi Soneye, the company will no longer fix prices, as the downstream sector has been fully deregulated. This puts to rest speculations that NNPCL would continue to fix prices despite the announcement of deregulation.

NNPCL's Executive Vice President of Downstream, Adedapo Segun, explained that foreign exchange illiquidity has been a significant factor influencing the fluctuation in petrol prices. He assured Nigerians that the current fuel scarcity is expected to subside in a few days as more stations recalibrate and begin selling PMS.

The company has supplied 30 million barrels of crude oil to the Dangote refinery so far, with plans to supply an additional 17 million barrels soon. NNPCL will supply 6.3 million barrels in September and 11.3 million barrels in October.

Segun emphasized that market forces should drive fuel prices, rather than any single entity. He noted that achieving a stable fuel supply and price would require perfect market conditions, including a more liquid foreign exchange market.

This development comes as a relief to Nigerians who have been grappling with fuel scarcity and price hikes. The Dangote Refinery's rollout of PMS is expected to increase fuel supply and stabilize prices in the market.

*A New Era for Nigeria's Petroleum Industry*

The commencement of petrol refining by the Dangote Refinery marks a significant milestone in Nigeria's petroleum industry. The refinery, which was commissioned in May 2023, has the potential to transform Nigeria's fuel landscape.

With the deregulation of the downstream sector, market forces will now determine petrol prices. This move is expected to bring about competition and efficiency in the market, ultimately benefiting consumers.

*Challenges Ahead*

However, challenges still lie ahead. The current pump price of petrol does not reflect market realities, and NNPCL's role as the sole importer of PMS is seen as abnormal.

Segun acknowledged that broader economic reforms might be needed to resolve the fuel pricing dilemma. He hinted that achieving a stable fuel supply and price would require perfect market conditions, including a more liquid foreign exchange market.

*A Call for Reforms*

As Nigeria navigates this new era in its petroleum industry, there is a need for reforms to ensure a stable and efficient market. The government must create an enabling environment for competition and investment in the sector.

The rollout of PMS by the Dangote Refinery is a step in the right direction. However, more needs to be done to address the underlying issues driving the fuel scarcity and price hikes.

*Conclusion*

The announcement by NNPCL that petrol from the Dangote Refinery will flood the market from September 15 is a welcome development. However, it is crucial to address the challenges ahead and create a conducive environment for competition and investment in the sector.

As Nigeria moves forward, it is essential to prioritize reforms that will ensure a stable and efficient petroleum industry. Only then can Nigerians enjoy the benefits of a deregulated market, including competitive prices and adequate fuel supply.