Marketers Peg Petrol Price at N1,200/L as 6 New Refineries Are Set to Begin Operations, NNPC Reacts

Marketers Peg Petrol Price at N1,200/L as 6 New Refineries Are Set to Begin Operations, NNPC Reacts

  • Oil marketers in Nigeria are insisting that petrol subsidy still exists, a claim the NNPCL said was a lie
  • The NNPCL insisted that petrol subsidy had ended following the deregulation of the downstream petroleum sector
  • Marketers said that petrol should sell for about N1,200 per litre following the crash of the naira and the rising cost of crude oil

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

The Nigerian National Petroleum Company Limited and Independent Petroleum Marketers Association of Nigeria (IPMAN) members clashed on Tuesday, January 2, 2024, over petrol subsidy removal.

Petrol marketers agitate for new prices as naira crashes Credit: Bloomberg/Contributor
Source: Getty Images

Naira crash forces marketers to demand an increase in petrol prices

The development follows the naira crash against the US dollar in the official and parallel markets.

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Based on the depreciating value of the naira, experts and oil marketers said the petrol subsidy was rising. Still, the NNPCL refuted the claim, stating that it was already recovering its total cost of petrol imports.

NNPC insists subsidy exists

Punch reports that Bismark Rewane, the CEO of Financial Derivatives Company, said that fuel subsidy was not removed but reduced.

Oil marketers stated that the subsidy on petrol was rising following the crash of the local currency against the US dollar and the cost of crude oil, saying that petrol should sell for N1,200 in the free market.

Currently, petrol sells for N617 per litre and N660 per litre and is solely imported by the NNPCL.

According to the Chief Corporate Communications Officer of NNPCL, Olufemi Soneye, the positions of the experts and marketers were mere assumptions, saying that the Nigerian government had ended subsidies on petrol.

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He said:

“At NNPC Ltd, we prioritize national development through energy security and sustainable growth. We reiterate that the Nigerian government does not pay subsidies on fuel; we recover total costs from our imported products.
“As a global energy company, we focus on fostering a vibrant and energy-secure Nigeria.”

Nigerian refineries ready to roll as FG gives orders to oil firms

The development comes as various refineries nationwide are about to begin production, with the Port Harcourt refinery undergoing a test run.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) ordered oil companies operating in Nigeria to supply about 483,000 barrels of crude oil daily to local refineries for the next six months beginning January 2024.

The initiative is part of Nigeria’s efforts to ensure regular supply to local refiners for domestic consumption,

Six refineries primed to begin operations

About six local refineries are expected to begin production in the coming year, including the 650,000-capacity Dangote refinery and Nigeria’s three refineries in Port Harcourt, Warri, and Kaduna.

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The Dangote refinery has received about four million barrels of crude oil out of the six million promised by the Nigeria National Petroleum Company Limited (NNPCL).

Dangote refinery receives 4th crude oil consignment reported that Africa’s largest refinery received another one million barrels shipment on Thursday, December 29, 2023.

According to recently published crude supply obligations guidelines by NUPRC, the Dangote refinery will receive the largest supply of 325,000 barrels daily.

After Dangote, another Nigerian refinery begins a test run to start operation soon, NNPC gives an update

Earlier, reported that the Nigerian National Petroleum Company Limited (NNPCL)has begun the supply of crude oil for the test-running of the Port Harcourt Refinery Company Limited.

Oil marketers confirmed the development and said the plant would supply petrol, diesel, and other products in 12 states, including Abia, Akwa Ibom, and Delta States.

The NNPC said that the test-running would be completed soon and that commercial production of products would commence shortly.


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Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner.

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