NNPC Increases Petrol Prices Amidst Market Changes
NNPCL increased the petrol pump price at its outlets to N1,030 per litre in Abuja. This rise follows NNPCL’s decision to end its exclusive purchase agreement with Dangote Refinery. The termination now gives independent oil marketers direct access to the refinery’s supplies. Industry pressure prompted the move, despite warnings that it could lead to increased petrol prices.
Termination of Dangote Refinery Agreement
NNPCL’s decision to terminate the exclusive agreement with Dangote Refinery marks a significant shift in Nigeria’s fuel supply chain. Under the previous arrangement, NNPCL acted as the intermediary, purchasing petrol from the refinery at N898.78 per litre and selling it to marketers at a reduced price. By cutting itself out as the middleman, NNPCL is allowing independent marketers to negotiate directly with the refinery.
Marketers’ Push for Direct Access to Supplies
The change comes after weeks of agitation by independent oil marketers, who demanded direct access to the Dangote Refinery. They argued that bypassing NNPCL would create a more competitive market and lower costs for consumers. However, industry experts had cautioned that this new arrangement could result in higher pump prices due to market volatility and fewer controlled pricing measures.
Petrol Price Hike to N1,030 per Litre
Predictably, the pump price of petrol has increased to N1,030 per litre, raising concerns among consumers and businesses. The new pricing structure may continue to fluctuate in the coming days as independent marketers navigate the evolving market dynamics. Analysts predict further increases may follow if the government does not establish a regulatory framework to stabilise pricing.
NNPC’s Role in Price Moderation
NNPCL moderated petrol prices by absorbing part of the cost burden in its role as a middleman. This action kept fuel prices lower than they would be under market-driven conditions. NNPCL stepped back, allowing the market to determine petrol prices. Many now worry these prices could become unaffordable for the average Nigerian consumer.
Potential Impact on Nigeria’s Economy
The rise in petrol prices will likely affect the economy, as fuel costs impact transportation, manufacturing, and goods. Nigeria’s ongoing inflation makes this price increase more challenging. Rising fuel costs may worsen the financial burden on households and businesses. This situation will likely prompt more demands for government intervention.
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