Emmanuel Ochayi
NNPCL No Longer the Sole Off-taker from Dangote Refinery
The Nigerian National Petroleum Company Limited (NNPCL) has announced that it will no longer serve as the exclusive middleman between Dangote Refinery and fuel marketers.
This shift in policy allows marketers to now buy petrol directly from the refinery, significantly changing the supply chain dynamics for Nigeria’s fuel industry.
Join our WhatsApp ChannelAn official from NNPCL, who confirmed the decision, stated, “Yes, it is true. We can no longer continue to bear that burden.” He added that this decision is intended to open up the market and improve competition in the fuel distribution network.
Fuel Marketers Can Now Buy Directly from Dangote Refinery
Previously, NNPCL was the sole off-taker of petrol from Dangote Refinery, acting as the middleman. Under the old arrangement, the company would purchase fuel from the refinery and then sell it to various fuel marketers. The move now means that marketers can negotiate directly with Dangote Refinery on pricing and supply based on market conditions.
A source familiar with the matter said, “This is a significant change. NNPCL is no longer holding the exclusive purchasing power, and it’s expected to benefit marketers by offering more flexibility.”
READ ALSO: Why NNPCL Can’t Meet Crude Supply Demands To Dangote Refinery- PENGASSAN
Impact on Fuel Supply Chain and Prices
This shift comes at a time when Nigeria’s fuel supply chain is grappling with various challenges. By ending its role as the sole off-taker, NNPCL aims to create a more competitive and stable market. “Fuel marketers now have direct access to the refinery, which could help in stabilising fuel prices as they negotiate directly without NNPCL’s intervention,” the source added.
The NNPCL had previously bought petrol from the Dangote Refinery at a price of N898.78 per litre and sold it to marketers at N765.99 per litre, absorbing a subsidy of nearly N133 per litre. With this arrangement no longer in place, the onus of negotiating prices and managing supply now rests directly with fuel marketers.
What the Change Means for Marketers
Marketers are expected to welcome this change, as it provides them with more autonomy in sourcing fuel. The NNPCL’s exit as the exclusive off-taker means marketers can potentially secure more favorable pricing deals and improve efficiency in the supply chain.
An industry expert commented, “This is a positive development. It will encourage competition and may result in better prices for consumers over time. Direct access to Dangote Refinery reduces dependency on NNPCL’s pricing structure, giving marketers a greater role in the market.”
NNPCL Focuses on Other Strategic Roles
As NNPCL steps away from its middleman role, the company is expected to focus on other strategic priorities in the oil and gas sector. This includes managing its own production and refining efforts while ensuring overall market stability. The move is also seen as a way to reduce financial burdens tied to subsidies.
The new arrangement between Dangote Refinery and fuel marketers marks a shift in Nigeria’s downstream oil sector, with a focus on liberalisation and more competition within the market.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
