As Nigeria gears up for the highly anticipated release of Premium Motor Spirit (PMS) from the $20 billion Dangote Petroleum Refinery, the Nigerian National Petroleum Company Limited (NNPC) has outlined key factors that will determine the price of petrol. Foremost among them is the foreign exchange rate, which has become a critical factor in shaping the cost of petrol as the market fully embraces deregulation.
The NNPC announced that it would commence lifting petrol from the refinery on September 15, with the expectation of easing fuel scarcity across the country. However, oil marketers have reported that around 2,000 tankers are still waiting to load product at various depots in Lagos, Warri, and Port Harcourt. The Federal Government has assured that a massive supply of petrol is on the way, though it has ruled out any direct price fixing, leaving prices to be dictated by market forces.
With foreign exchange scarcity driving price fluctuations, the NNPC’s Executive Vice President of Downstream, Adedapo Segun, emphasized that the deregulated market will now be governed by unrestricted free market dynamics as provided for in the Petroleum Industry Act. This shift means that petrol prices will no longer be controlled by the government or NNPC, but rather influenced by the exchange rate and other economic factors.
The NNPC has supplied 30 million barrels of crude oil to the Dangote refinery so far, with plans for an additional 17 million barrels by October. As the refinery gears up to roll out PMS, NNPC is working closely with private refineries to ensure a steady supply of fuel to meet the needs of Nigerians.
While NNPC’s role as the sole importer of petrol is seen as a temporary measure in response to market conditions, the long-term goal is for the free market to determine prices. For now, the focus remains on stabilizing supply, with assurances that the scarcity will ease in the coming days as more stations recalibrate and resume operations.
As Nigerians wait for the floodgates to open on the Dangote Refinery’s petrol supply, one thing is clear: the future of fuel pricing will be shaped by the forces of demand and supply, guided by the ever-fluctuating exchange rate
