Yemisi Izuora
There are prospects of fair pricing of petrol in the domestic market following decision by the Nigerian National Petroleum Company (NNPC) to raise domestic crude supply to Dangote refinery.
The NNPC cargoes are cheaper for the refinery because of lower shipping costs. Dangote recently had to pay premiums as high as $18 a barrel over the Brent crude benchmark to secure cargoes from the international market, the official said. That would be about $137 a barrel based on Tuesday’s Brent price.
NNPC did not respond immediately to a request for comment, reports Reuters.
Dangote has raised petrol supplies to Nigeria’s domestic market this month, meeting the needs of a little more than two thirds of Nigeria’s daily requirements of 60 million litres.
It has also had to increase petrol depot prices by about 13 per cent.
The NNPCL is allocating seven May cargoes for Dangote oil refinery, up from five in previous months, after the spike in fuel prices caused by the Iran war, two trade sources and a refinery official told Reuters.
Fuel prices in Nigeria have reached record highs and the country’s Dangote refinery has previously said the company could source only about five crude cargoes a month locally, far short of the 13–15 it requires, forcing it to import the rest at prices dictated by the impact of war in the Middle East.
An increase in crude allocations to the 650,000 barrel per day refinery, Africa’s largest, could also curb volumes of Nigerian crude available for export at a time when the Iran war has drastically cut supply from the Middle East, forcing buyers to hunt far and wide for available cargoes.
“NNPC has allocated more cargoes to Dangote for May,” a senior Dangote official said. “While this will not completely meet our demands, it can help. We are also in negotiation with NNPC for more volumes.”