By Charles Emmanuel
In a pivotal development for Nigeria’s petroleum sector, the Nigerian National Petroleum Company Limited (NNPC) and oil marketers have successfully reached an agreement on the ex-depot of fuel price. This agreement comes after weeks of negotiations and is expected to significantly impact the availability of fuel across the country.
The resolution of this dispute follows the intervention of the Department of State Services (DSS), which played a crucial role in facilitating discussions between the two parties. While the agreement does not anticipate a substantial reduction in prices at filling stations, it is expected to streamline operations and enhance the supply chain for petrol distribution.
Details of the Fuel Price Agreement
Under the new agreement, the ex-depot price of petrol has been set at N955 per litre for members of the Independent Petroleum Marketers Association of Nigeria (IPMAN). This decision marks a significant shift from previous pricing disputes, particularly concerning the pricing of petrol sourced from the Dangote refinery, which had been set at N1,010 in Lagos.
Maigandi, the President of IPMAN, confirmed the new pricing structure, stating, “In Lagos, they are giving us the product at the rate of N995 per litre as loading price. When they start loading today and tomorrow, the product will be available.”
The negotiations were prompted by IPMAN’s accusations that NNPC had increased its prices beyond the rates at which petrol was purchased from the Dangote refinery. This led to a demand for refunds from NNPC for deposits made by IPMAN members for the product.
Government’s Role in Deregulation
The Nigerian government has taken significant steps to deregulate the petroleum market, allowing oil marketers to source petrol directly from the Dangote refinery. This move is part of the strategy to encourage competition and improve the efficiency of the downstream oil sector. Wale Edun, chairman of the Naira-For-Crude Sale Implementation Committee and Minister of Finance, emphasized the importance of this development, stating, “This is part of the government’s bigger plan to deregulate the petroleum market and encourage competition.”
With the government’s approval, petroleum marketers are now authorized to lift petroleum products, particularly Premium Motor Spirit (PMS), directly from the Dangote refinery. This shift marks the end of NNPC’s role as the sole distributor of the refinery’s petrol, paving the way for a more competitive market landscape.
While the agreement between NNPC and oil marketers is a positive step forward, challenges remain in the Nigerian fuel market. The country has faced persistent issues related to fuel supply, distribution inefficiencies, and fluctuating prices. Ensuring that the new pricing structure is adhered to by all marketers will be crucial in maintaining market stability.
As loading operations commence and the new pricing structure takes effect, the focus will be on how effectively NNPC and oil marketers can implement the agreement and address any emerging challenges.
