The Federal Government has begun discussions to determine the pricing of petrol produced by the Dangote Petroleum Refinery, which is set to begin operations in September 2024. These discussions come as the government plans to start selling crude oil to local refineries in Naira from October 1, 2024. Key considerations include whether to offer subsidies for Dangote-produced petrol or allow market forces to dictate the price.
Currently, petrol prices in Nigeria range between ₦600 and ₦700 per litre, with the landing cost at approximately ₦1,117 per litre. Oil marketers have indicated that petrol from the Dangote Refinery could be more expensive unless the government intervenes. The Nigerian National Petroleum Corporation (NNPC) has been selling petrol at about half of its landing cost due to subsidies, which have cost the government ₦7.8 trillion in the first seven months of 2024.
Further meetings between the government, Dangote Refinery, and other stakeholders will finalize the pricing strategy. The government’s introduction of the Compressed Natural Gas (CNG) initiative is also part of a broader effort to reduce the financial burden of petrol subsidies. However, there is still uncertainty about how these changes will impact consumers, as discussions continue on the best approach to balance market realities with public welfare.