Nigeria has ended the Nigerian National Petroleum Corporation’s (NNPC) role as the exclusive buyer of gasoline from Aliko Dangote’s vast refinery, signaling a shift towards full deregulation of the market. Retailers are now permitted to negotiate directly with local refineries, marking a significant departure from the previous system in which the NNPC was the sole purchaser and distributor of refined petroleum products, Finance Minister Wale Edun announced on Friday.
Historically, Africa’s largest crude oil producer exported its oil and imported refined petroleum, sold at subsidized rates, using its limited foreign exchange reserves. However, in September, Nigeria raised fuel prices closer to market levels, coinciding with Dangote’s refinery near Lagos beginning to refine gasoline locally.
The new policy allows marketers to establish commercial terms directly with refineries, fostering a competitive market and improving the efficiency of the petroleum supply chain. According to Edun, the transition is expected to enhance product availability and stabilize market conditions, benefiting all Nigerians. The announcement followed a meeting to review the implementation of selling crude to Dangote in naira to alleviate pressure on Nigeria’s foreign exchange.
