Nigerian State Firm Raises Gasoline Prices as New Supply Comes Online
Nigeria’s state oil company NNPC Ltd is raising the price of gasoline by 11% after it started buying fuel from the new Dangote refinery, Africa’s biggest.
The new estimated petrol prices are based on negotiated terms between NNPC Ltd. and Dangote Refinery which recognize the current international gasoline prices and the prevailing foreign exchange rate in line with the local petroleum act, the state company said.
NNPC Ltd also confirmed on Monday that it began buying gasoline from the Dangote refinery on Sunday and that it is paying the private refinery in U.S. dollars for the September 2024 offtake. Transactions in the local Nigerian currency, naira, will only commence on October 1, 2024, NNPC added.
The Dangote refinery is set to ramp up production of gasoline soon, potentially upending global gasoline flows.
The newly operational refinery is poised to turn OPEC’s largest African crude oil producer from a gasoline importer to a gasoline exporter, impacting fuel market balances, especially in Europe.
The Dangote refinery began the production of fuels in January 2024, marking the start-up of the plant that has seen years of delays.
The refinery, which has a processing capacity of 650,000 barrels per day (bpd), will meet 100% of Nigeria’s demand for all refined petroleum products and will also have a surplus of each of the products for export.
It is expected that once the refinery is fully operational at some point in 2025, more than half of its processing capacity will be earmarked for gasoline production.
In the middle of June, Dangote group’s president Aliko Dangote said that the refinery was delaying the start of gasoline deliveries after the middle of July.
Back then, Dangote, Africa’s richest man, said that the refinery would be able to take gasoline to the market by the third week of July.
This timeline has slipped, and most industry analysts expect considerable volumes of gasoline out of Nigeria to hit international markets next year.