Nigeria Nigerians Brace for N1,300 Petrol Prices as NNPC Faces Financial Strain

Nigerian petrol prices are projected to reach N1,300 per litre due to a cash crunch at the Nigerian National Petroleum Company (NNPC). The rising landing costs and supply shortages have prompted concerns, while the Dangote Refinery's new production could help stabilize the market.

Petrol prices in Nigeria are projected to reach N1,300 per litre due to a cash crunch impacting the Nigerian National Petroleum Company Limited (NNPC). The NNPC, the sole importer of petrol, has faced financial challenges, with the landing cost of petrol surging to N1,203 per litre from N720 in October 2023. Industry experts warn that if the NNPC stops paying subsidies, petrol prices could settle between N1,300 and N1,350 per litre.

An independent oil marketer emphasized that the NNPC's financial difficulties arise in a deregulated market, where its dominant position complicates competition. The NNPC's CEO, Tunji Oyebanji, stressed that selling below landing costs is unsustainable and called for other marketers to be permitted to import refined products to alleviate supply issues.

Gillis Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), noted that the current landing cost of refined products suggests no imminent reduction in petrol prices. He highlighted the necessity for domestic refineries to operate optimally.

In a timely development, Dangote Refinery announced it has begun producing petrol, which is expected to hit the market this week. The NNPC will exclusively purchase petrol from Dangote, potentially alleviating the ongoing fuel scarcity and providing a more stable supply of petrol to Nigerian consumers. However, many filling stations across major cities remain closed, and petrol prices at operational outlets have reached as high as N1,000 per litre.