October 13, (THEWILL) – As someone who watched the Nigerian oil industry with frustration and hope, the recent news of the Nigerian National Petroleum Company Limited (NNPCL) ending its exclusive purchase agreement with the Dangote Refinery gives me an unexplainable joy. For years, Nigeria has been stuck in the claws of monopolistic practices and market inefficiencies in which Dangote seems to be at the centre.
The news of the creation of Dangote Refinery felt like the beginning of a revolution in Nigeria. The refinery is like our answered prayer, with the capacity to address our fuel demands, reduce imports and stabilise petrol prices. But over time, as I followed the developments, the shine started to wear off.
However, this latest move by the NNPCL to step back and allow other petroleum marketers to directly purchase petrol from the Dangote Refinery feels like a necessary course correction.
The 650,000 barrels-per-day Dangote Refinery was supposed to be the crown jewel of Nigeria’s oil industry, capable of not just meeting our domestic fuel needs but also exporting fuel to other countries. The idea was that we could finally stop relying on imports, bring down fuel prices, and create a more stable energy market. But as with many ambitious projects, disappointment set in as the reality didn’t quite match the hype.
Despite all the fanfare surrounding Dangote Refinery, its performance so far has been disappointing. Publicly, Dangote Refinery boasted about revolutionizing Nigeria’s refining capacity and lowering petrol prices, but the numbers don’t lie. According to a news report by Premium Times, NNPCL had been buying petrol from Dangote Refinery at N898.78 per litre and selling it to marketers at N765.99, paying a subsidy of almost N133 per litre.
The same subsidy that was removed in 2023, making life unbearable. Meanwhile, the same refinery that promised to supply 400 million litres of petrol between mid-September and the end of the month only managed to deliver about 103 million litres—just 26 per cent of what was expected. A massive shortfall.
It’s not just about missing targets. The refinery’s petrol pricing has been higher than imported fuel, which is a slap in the face for those of us who believed the hype–like me. If Dangote Refinery was supposed to make fuel cheaper, how is it that its petrol is priced at N898.78 per litre, while imported petrol was going for N858 per litre? These broken promises are not only frustrating; they’re damaging to the trust consumers placed in this supposed game-changer.
When I read the news report on Premium Times that the NNPC was ending its exclusive deal with Dangote, I felt a sense of relief, like my voice fighting for Nigerians is being heard. Finally, some sanity was returning to the market. This decision is more than just a bureaucratic move—it’s a lifeline for independent marketers and, ultimately, consumers like you and me. Without competition, prices soar, quality declines, and inefficiencies become the norm.
I sincerely applaud NNPCL for this huge step taken to eliminate any monopolistic tendency that might rear its head. It is a thing of joy to see NNPC putting consumers into consideration and ensuring a competitive market is provided for oil marketers to enjoy fair trade, without constraint.
To me, NNPCL’s withdrawal is a breath of fresh air for the oil market, allowing other marketers to buy petrol directly from Dangote Refinery on a “willing buyer, willing seller” basis or even buy directly from other refineries. Ensuring that independent marketers will no longer be shut out. They can negotiate prices directly with the refinery, giving them the freedom to compete on a level playing field.
If NNPC hadn’t stopped this exclusive lifting of oil from Dangote, giving marketers equal access in the market, it would not be surprising if Nigerians eventually purchased petrol at N1,500 per litre. With marketers lifting oil at N898 per litre, other cost and expenses, and profit realization, we would have been done for.
As a consumer myself, the significance of NNPCL’s decision is something we all should celebrate and applaud because, witnessing another monopoly in oil as we witnessed in cement will definitely cause a huge uproar in this already dwindling economy.
One of other implications of NNPCL’s withdrawal, is the end of the subsidies on petrol from Dangote Refinery. With the NNPCL no longer covering the price differential of N133 per litre, marketers can now buy petrol directly from the refinery at market prices and sell it at cost, adding their own margins to cover operational expenses.
They can even decide to import, since imported petrol ends up cheaper than Dangote Refinery oil. It is a great thing that NNPC realizes that competition in the oil sector is what Nigerians truly need to survive. We do not desire another monopoly, especially on such an essential commodity like oil. A major determinant of the price of essential goods and commodities.
NNPC has made it so that, if more marketers are able to negotiate prices with Dangote or source products elsewhere, the competition will increase. This competition comes with better prices, improved efficiency, and more stability in supply chains.
This significant step against the monopoly that threatened to form around the Dangote Refinery is now less of a concern, and independent marketers will have more freedom to operate and offer consumers better options.
If Dangote Refinery decides to play Nigerians, marketers now have the luxury of choice. Although, I understand that there may be some short-term challenges, like potential price hikes, the long-term benefits of a competitive and efficient market will far outweigh these initial hurdles.
As consumers, we’ve been promised a lot over the years, and many of those promises have gone unfulfilled. But with this move towards greater competition and deregulation, there’s finally hope that Nigeria’s oil sector can evolve into something better—something that works for all of us, not just the big players. Let’s hope that Dangote Refinery, and the industry as a whole, can rise to the occasion and deliver the change we’ve been waiting for.
***written by Maxwell Adeyemi Adeleye
Adeleye is a UK-based strategic communications expert and real estate broker
