FG Announces 30-Day Petrol Discount at NNPC Stations

The Federal Government has announced a 30-day discount on petrol dispensed by the Nigerian National Petroleum Company Limited (NNPC) as part of measures to ease pressure from rising fuel and transportation costs.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the measure on Thursday during a press briefing on fuel prices and subsidy-related issues in Abuja.

Oyedele said the discount would initially run for 30 days, with public transport operators across the country receiving priority under the arrangement.

He stressed that the measure should not be interpreted as a return to the petrol subsidy regime.

According to the minister, the government would instead make petrol available through NNPC at cost during the period.

“We are offering a discount on petrol dispensed by NNPC Limited for the next 30 days in the first instance with priority for public transporters nationwide. So, it’s not a subsidy, government is just saying we sell to you at cost,” Oyedele said.

The announcement comes amid continued pressure from rising petrol prices and transportation costs, which have affected households, workers and businesses across the country.

Public transporters to receive priority

The Federal Government said public transport operators would be prioritised under the 30-day arrangement.

The move is expected to provide some relief to transport operators whose businesses are directly affected by changes in petrol prices and, in turn, to commuters who depend on public transportation.

The government has not yet provided all the operational details of how the priority arrangement will work or the exact discount that individual motorists and transport operators will receive.

The announcement is separate from the NNPC Retail ₦66-per-litre Independence Day promotion, which ran from October 1 to October 7 through the NNPC Fuel App.

FG insists measure is not a subsidy

Oyedele’s clarification comes against the background of renewed debate over petrol pricing and calls for the government to intervene as fuel costs continue to affect the wider economy.

The minister maintained that the latest arrangement does not restore a blanket petrol subsidy.

Instead, the government intends to use NNPC’s retail network to provide petrol at cost for the initial 30-day period.

The Federal Government is also considering other measures aimed at reducing volatility in petrol prices and limiting the effect of global crude oil prices and exchange-rate movements on domestic fuel costs.

One of the measures announced by the minister is a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol. The government says the proposal is intended to smooth price movements rather than permanently fix petrol prices.

The proposed ceiling would be reviewed periodically, with the government saying the objective is to prevent sharp swings in petrol prices caused by movements in international crude prices and foreign exchange.

Broader measures planned

The 30-day NNPC discount forms part of a wider package of measures being considered by the Federal Government to reduce pressure from fuel and transportation costs.

The government is also working on arrangements for forward crude sales to domestic refineries, which would provide refiners with greater certainty over crude supply and potentially reduce exposure to fluctuations in international crude prices.

The government has further highlighted the expansion of Compressed Natural Gas as an alternative energy source for transportation.

Oyedele said the government was seeking a combination of immediate interventions and longer-term measures to reduce the impact of energy-price volatility on Nigerians.

The Federal Government’s latest petrol intervention is therefore being presented as a temporary cost-relief measure, rather than a reversal of the fuel subsidy reforms introduced in 2023.

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The Nigerian National Petroleum Company Limited recorded about N27.76 trillion in cost of sales, selling and distribution expenses, and general and administrative expenses in 2025, according to an analysis of its audited financial statements.

The figure represented about 80.4 per cent of the company’s N34.52 trillion revenue for the year and has prompted attention on the cost structure of the national oil company.

However, the N27.76 trillion figure does not appear as a single line item called “operating expenses” in NNPC’s accounts. It is derived from separate components of the audited financial statements, including N25.14 trillion in cost of sales, N33.1 billion in selling and distribution expenses and N2.59 trillion in general and administrative expenses.

The figures came as NNPC reported a profit after tax of N7.2 trillion for 2025, up from N5.4 trillion in 2024. The company also reported revenue of N34.5 trillion, EBITDA of N18 trillion and operating cash flow of N12.8 trillion.

Cost structure compared with other oil companies

The scale of NNPC’s expenditure becomes more notable when compared with financial figures reported by other national oil companies.

Using an average exchange rate of N1,518 to the dollar for 2025, the N27.76 trillion cost translates to approximately $18.29 billion, while the company’s revenue was about $22.74 billion.

Brazil’s state-controlled Petrobras reported $89.2 billion in sales revenue and approximately $16.3 billion in operating costs in 2025.

On the figures reported, NNPC’s operating costs were about 13 per cent higher than Petrobras’ despite Petrobras generating almost four times as much revenue.

The comparison also shows a difference in revenue generated for each dollar spent on operating costs. NNPC generated approximately $1.24 in revenue for every dollar spent on the identified operating costs, compared with about $5.46 for Petrobras.

Saudi Aramco reported $445.65 billion in revenue and other income related to sales in 2025, alongside $257.17 billion in operating costs. Its operating costs represented approximately 57.7 per cent of revenue.

Norway’s Equinor reported $106.46 billion in revenue and other income and $81.11 billion in total operating expenses, putting its operating expenses at about 76.2 per cent of revenue.

Angola’s Sonangol reported consolidated turnover of $9.15 billion, EBITDA of $2.63 billion and net profit of more than $750 million in 2025.

The comparisons provide context for NNPC’s cost structure, although differences in production volumes, business portfolios, downstream activities and accounting treatment mean that revenue-to-cost ratios alone do not establish which company is more efficient.

Cost of sales accounts for most expenditure

The largest component of NNPC’s identified operating costs was cost of sales, which stood at N25.14 trillion in 2025.

The figure was lower than the N33.3 trillion recorded in 2024 but still represented the overwhelming share of the company’s total costs for the year.

Petroleum products accounted for N1.79 trillion, while depreciation of oil and gas properties stood at N3.71 trillion.

Depreciation is an accounting expense that allocates the cost of an asset over its useful life and does not represent a direct cash payment during the year.

Royalties accounted for N4.66 trillion, while direct well expenses were N4.15 trillion.

NNPC also reported N1.69 trillion in flow-station expenses, N1.86 trillion for gas purchased and N2.79 trillion for crude oil purchased.

Other production-related expenditure included N1.06 trillion for crude handling and port charges, N499 billion for gas flaring and N144.4 billion in allocated technical and production costs.

The company also recorded N514.7 billion as a Niger Delta Development Commission levy, N66.2 billion for freight, insurance and other charges and N74.5 billion for safety, environmental and pollution-control expenses.

Another N174.6 billion was recorded for variation in crude stock.

Other direct and administrative costs

NNPC spent N13.8 billion on pipeline maintenance, N213.9 billion on insurance and security, N254.5 billion on labour, N14.1 billion on technical and consultancy charges and N61.6 billion on medical expenses.

The company also reported N1.28 trillion in other direct costs.

According to NNPC, these costs cover the maintenance and operation of oil and gas production assets, including wells, production facilities, pipelines and processing infrastructure.

They also include production chemicals, integrity management, repairs and other field-support services directly connected to production activities.

Beyond the cost of sales, NNPC recorded N33.1 billion in selling and distribution expenses.

The company said these costs were related to services acquired by NNPC Retail for transporting petroleum products to depots within and outside Nigeria.

General and administrative expenses amounted to N2.59 trillion, compared with N3.5 trillion in 2024.

Employee benefits represented N813.9 billion and covered salaries and wages, staff allowances, welfare expenses and other long-term employee benefits.

Depreciation of other property, plant and equipment amounted to N665.8 billion, while depreciation of right-of-use assets stood at N109.3 billion.

Other administrative expenses included N87.3 billion in professional and consultancy fees, N86.4 billion for software licences and maintenance, N129.1 billion for security, N114.8 billion for transport and travelling and N111 billion for training and recruitment.

NNPC also recorded N89.3 billion in insurance costs, N29.2 billion for local community development, N10.3 billion in donations, N33.5 billion for rent and rates and N9.2 billion in bank charges.

Another N282.7 billion was reported under other expenses, which the company said related to joint-venture material-handling expenses and JV personnel costs.

Profit increased despite lower revenue

The high cost structure came in a year when NNPC’s revenue declined by 24 per cent to N34.5 trillion, largely due to lower crude oil prices and reduced volumes of white products following market deregulation in 2024.

Despite the decline in revenue, profit after tax increased by 33 per cent to N7.2 trillion from N5.4 trillion in 2024.

NNPC attributed the improved performance to stronger operational efficiency, cost discipline and improved recovery of outstanding receivables.

The company said it also reduced general and administrative expenses by about a quarter during the year.

According to NNPC’s financial management, G&A expenses fell from about eight per cent of revenue in 2024 to about seven per cent in 2025 despite the lower revenue base.

The recovery of long-standing receivables also contributed to the improvement in profit because some provisions previously made against those receivables were reversed.

Production reaches five-year high

NNPC’s 2025 results also showed improvements in production.

Crude oil and condensate production averaged 1.77 million barrels per day, the company’s highest level in five years.

Natural gas output averaged 7.2 billion standard cubic feet per day, representing a three-year high.

The company said crude oil and condensate production increased to 565.8 million barrels for the year, while natural gas production reached 2,606.2 billion standard cubic feet.

NNPC said its improved production performance, stronger collections and cost-management measures contributed to the stronger financial result.

NNPC targets further cost reductions

The company has said it intends to continue improving operational efficiency and reducing costs.

Its Chief Financial Officer, Adedapo Segun, said unit operating costs in the upstream business fell year-on-year and that further reductions were expected.

NNPC is also targeting crude oil production of two million barrels per day by 2027 and three million barrels per day by 2030.

The company plans to mobilise $60 billion in upstream, midstream and downstream investments by 2030 while advancing major gas infrastructure projects, including the Ajaokuta-Kaduna-Kano pipeline, the Escravos-Lagos Pipeline System and the Obiafu-Obrikom-Oben gas pipeline.

The financial results therefore present two sides of NNPC’s 2025 performance: a significant increase in profit and production alongside a substantial cost base.

The company’s ability to reduce unit costs, improve collections and translate higher production into stronger earnings will remain important as it pursues its longer-term investment and production targets.

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Petrol prices have increased across several filling stations in the Federal Capital Territory following a fresh price adjustment by Dangote Petroleum Refinery.

The refinery raised its gantry price by ₦85, moving it from ₦1,265 to ₦1,350 per litre.

The increase represents a 6.7 per cent rise and pushes Dangote’s wholesale price above the current petrol landing cost of ₦1,311 per litre.

The latest adjustment comes amid a rise in global crude oil prices. Brent crude, Nigeria’s benchmark, was trading at about $108.21 per barrel, up from $107.92.

The development has intensified pressure on downstream operators, with some filling stations in Abuja already increasing their pump prices.

Abuja Filling Stations Increase Pump Prices

Checks by the News Agency of Nigeria on Sunday showed that several outlets had begun selling petrol at higher prices.

MRS retail outlets increased their pump price from ₦1,350 to ₦1,395 per litre.

NIPCO outlets also raised their price from ₦1,350 to ₦1,430 per litre, while Mobil outlets increased theirs to ₦1,400 per litre.

A petrol attendant at an MRS station said motorists could face another increase when newly purchased stock arrives.

“We are currently selling our old stock at N1,395 per litre, but from tomorrow, once the new stock arrives, the price will be higher,” she said.

Economists Warn of Higher Inflation

Economist and development expert Aliyu Ilias warned that the latest petrol price increase could worsen inflation and deepen economic hardship.

He said higher petrol prices would likely increase transportation and production costs, particularly for food and other essential commodities.

“This kind of change is not good for the economy at all, and people are going to face more hardship as a result,” Ilias said.

Expert Calls for Stronger Regulation

Former Secretary-General of the Organisation of African Trade Union Unity, Owei Lakemfa, called for stronger measures to protect consumers from global oil price fluctuations.

Lakemfa argued that Nigeria should strengthen economic planning and its regulatory framework to prevent sudden increases in domestic petrol prices.

He said Nigeria’s position as an oil-producing country should provide an advantage through domestic refining.

The former labour leader also warned about the structure of Nigeria’s downstream petroleum market, which he said contained elements of oligopoly and monopoly.

He urged regulatory agencies to prevent excessive influence over the pricing of petrol.

Marketers Explain Frequent Price Changes

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said marketers had reviewed their pump prices following repeated adjustments by Dangote Refinery.

Ukadike said the frequent price changes were creating uncertainty for marketers and consumers because replacement costs could change rapidly.

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Petrol prices may soon decline to around N1,200 per litre as the Dangote Petroleum Refinery and other depot operators continue to reduce ex-depot rates following a sharp drop in global crude oil prices.

The development comes after the Dangote Refinery announced a N75 reduction in its petrol gantry price, lowering the rate from N1,250 per litre to N1,175 per litre.

According to industry data, the adjustment has prompted other depot owners to cut their prices to about N1,180 per litre, signaling a potential reduction in retail pump prices across the country.

In a circular issued to marketers, the refinery attributed the price cut to easing tensions in the Middle East, which had previously pushed energy prices higher.

“Following the de-escalation of tensions in the Middle East, which has impacted energy prices, we wish to inform you that we have reviewed our premium motor spirit gantry/coastal price,” the refinery stated.

The company also reduced its coastal price per metric tonne from N1,595,790 to N1,495,215, with the new rates taking effect from June 16, 2026.

Despite the reduction at the depot level, many filling stations are still selling petrol at around N1,280 per litre, as marketers seek to clear existing stocks purchased at higher prices.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said consumers should expect pump prices to begin adjusting within days as new supplies enter the market.

According to him, petrol could sell for between N1,200 and N1,250 per litre in Lagos, while prices in other parts of the country may remain slightly higher due to transportation and logistics costs.

“This announcement is enabling people who have old stocks to clear out their stocks and prepare to take fresh supplies. By tomorrow and Friday, people will start adjusting to the new price,” he said.

Ukadike explained that marketers cannot immediately reduce prices without incurring losses on existing inventory purchased before the latest adjustment.

The latest reduction follows a significant decline in international crude oil prices after reports of a peace agreement between the United States and Iran and the reopening of the Strait of Hormuz.

Global oil benchmark Brent crude reportedly fell from about $87 per barrel to below $80 per barrel after the agreement, easing pressure on fuel markets worldwide.

During the three-month geopolitical crisis, crude prices surged above $100 per barrel and, at some points, exceeded $120 per barrel, contributing to higher fuel prices in Nigeria.

The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), however, raised concerns that imported petroleum products appear cheaper than some locally refined products and called for increased competition in the downstream sector.

Meanwhile, industry observers believe further reductions may occur if crude oil prices continue their downward trend.

Some analysts have projected that petrol prices could fall below N1,000 per litre in the coming weeks if the ceasefire agreement remains effective and global oil markets remain stable.

A refinery official, however, noted that further reductions may take time because refiners are still processing crude oil purchased at previously higher prices.

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Nigeria exported a total of 55.39 million barrels of crude oil in the first two months of 2026, even as the Dangote Petroleum Refinery grappled with a persistent shortage of domestic crude supply.

Data from the Central Bank of Nigeria showed that crude exports stood at 31.31 million barrels in January and 24.08 million barrels in February, leaving approximately 26.55 million barrels available for local refining.

Despite being Africa’s largest oil producer, Nigeria has struggled to meet the feedstock demands of its biggest refinery. The 650,000 barrels-per-day Dangote facility has repeatedly raised concerns over inadequate crude allocation, forcing it to rely on imports to sustain operations.

Between October 2025 and mid-March 2026, the refinery recorded a supply shortfall of about 79.53 million barrels. It received only 29.21 million barrels out of the estimated 108.74 million barrels required during the period, translating to a supply performance of just 26.9 percent.

Breakdown of deliveries shows the refinery received 4.55 million barrels in October, 6.45 million in November, 4.30 million in December, 5.65 million in January, and 4.66 million in February. In March, only 3.6 million barrels were supplied within the first half of the month.

The refinery has attributed the shortfall to local oil producers’ failure to meet supply obligations under the Petroleum Industry Act, raising concerns over compliance within the upstream sector.

Meanwhile, the Nigerian National Petroleum Company Limited confirmed it has been sourcing crude from third-party suppliers at international market prices to support refinery operations.

The supply gap has had ripple effects on fuel pricing. Petrol prices surged above ₦1,300 per litre during the recent Iran–US tensions before easing to around ₦1,250, with the refinery linking the increase to the high cost of imported crude.

Industry stakeholders, including the Crude Oil Refiners Association of Nigeria, have called for improved crude supply to domestic refineries, stressing that consistent feedstock is critical for profitability, price stability, and national energy security.

The development highlights ongoing challenges in Nigeria’s oil sector, where export priorities continue to compete with domestic refining needs.

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Nigeria and Morocco are advancing plans to formalise one of Africa’s most ambitious energy projects, with a $25 billion gas pipeline deal now scheduled for signing in 2026.

The project, widely known as the African Atlantic Gas Pipeline, is expected to deepen regional integration, expand energy access, and position West Africa as a strategic supplier to Europe.

Details of the development were disclosed by Amina Benkhadra, head of Morocco’s hydrocarbons and mining agency, ONHYM. She confirmed that both countries are preparing to sign an intergovernmental agreement (IGA), which will provide the legal and political framework for the pipeline.

Once signed, the agreement will pave the way for the establishment of a joint regulatory authority in Nigeria, comprising ministerial representatives from the 13 participating countries. The body is expected to coordinate policies, ensure compliance, and drive cross-border collaboration on the project.

Stretching approximately 6,900 kilometres, the pipeline will follow a hybrid offshore and onshore route, with a projected capacity of 30 billion cubic metres of gas annually. Of this volume, about 15 billion cubic metres will supply Morocco, while the remainder is expected to support exports to European markets.

The project has long been backed by the Economic Community of West African States, reflecting its strategic importance to the region’s energy security and economic development goals.

Originally conceived over a decade ago, the pipeline has now completed its feasibility studies and front-end engineering design, marking a major milestone ahead of construction.

Benkhadra revealed that a project company will be established in Morocco as a joint venture between Nigerian National Petroleum Company and ONHYM. This entity will oversee execution, financing, and construction, signalling a shift from planning to implementation.

The pipeline is designed to be developed in phases, with each segment operating as a standalone system. This approach is expected to accelerate delivery timelines and allow early benefits, even before the full network is completed.

Initial phases will connect Morocco to gas reserves in Mauritania and Senegal, while also linking Ghana to Côte d’Ivoire. The final segment will extend the pipeline to Nigeria’s vast gas fields, creating a continuous energy corridor along the West African coast.

First gas from the initial segments is projected for 2031, although timelines may depend on financing arrangements and regulatory approvals across participating countries.

Despite growing investor interest, funding for the project has not yet been fully secured. According to Benkhadra, financing will be structured through a mix of equity and debt, to be mobilised by the project company.

Analysts say the scale and structure of the project make it attractive to international investors, particularly as Europe seeks alternative energy sources amid shifting global dynamics.

Beyond exports, the pipeline is expected to deliver significant domestic benefits across West Africa. It is projected to boost electricity generation, support industrialisation, and unlock opportunities in sectors such as manufacturing and mining.

Energy experts also note that the project could help address long-standing energy deficits in several participating countries, while strengthening economic ties across the region.

For Nigeria, the pipeline represents an opportunity to monetise its vast gas reserves and expand its influence in regional and global energy markets.

However, industry observers caution that successful execution will depend on sustained political will, regulatory coordination, and timely financing—factors that have historically slowed large-scale infrastructure projects in the region.

As preparations for the 2026 agreement gather momentum, stakeholders say the Nigeria-Morocco gas pipeline could redefine Africa’s energy landscape if delivered as planned.

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The Dangote Petroleum Refinery & Petrochemicals has reduced its gantry price for Premium Motor Spirit (petrol) to N1,200 per litre, while fixing its coastal price at N1,153 per litre, a move expected to influence fuel pricing across Nigeria’s downstream sector.

The adjustment was confirmed by the Group’s spokesperson, Anthony Chiejina, who said the review reflects changes in the refinery’s pricing framework amid ongoing volatility in the global oil market.

According to him, tensions in the Middle East continue to impact crude oil prices globally, prompting the refinery to revise its rates downward to align with prevailing market conditions. He noted that the new pricing structure is expected to affect supply costs across distribution channels, including depots and retail outlets.

With the revised gantry price of N1,200 per litre, fuel marketers are likely to adjust their cost calculations, particularly those sourcing products locally rather than relying on imports. The coastal price of N1,153 per litre is also expected to support marine deliveries to depots in Nigeria’s southern regions, offering distributors an alternative supply route.

The price cut comes after a period of consistent increases in petrol prices, which followed geopolitical tensions linked to the US-Iran tensions 2026 that escalated in late February. Petrol prices had climbed from about N840 per litre before the crisis to around N1,300 in recent days. The latest reduction from N1,275 to N1,200 may lead to a slight drop in pump prices, potentially easing pressure on consumers.

However, the refinery continues to face operational challenges tied to crude oil supply. Its supply arrangement with the Nigerian National Petroleum Company Limited has reportedly encountered setbacks, with a significant shortfall in crude deliveries.

Findings indicate that between October 2025 and mid-March 2026, the refinery recorded a deficit of about 79.53 million barrels of crude. The facility requires roughly 19.77 million barrels monthly to operate at full capacity but has received considerably less within the period.

Available data shows the refinery got 4.55 million barrels in October, 6.45 million in November, 4.30 million in December, 5.65 million in January, and 4.66 million in February. In March, only 3.6 million barrels were supplied between the 1st and 15th.

A senior official at the refinery argued that the situation contradicts provisions of the Petroleum Industry Act, which prioritises domestic crude supply before exports. Despite this, the country has continued crude exports while the $20 billion Lekki-based refinery struggles with insufficient feedstock.

Also speaking on the issue, the refinery’s Managing Director, David Bird, disclosed that the plant currently receives only five cargoes of crude, far below the 13 cargoes agreed under the naira-for-crude deal.

The combined impact of pricing adjustments and supply constraints continues to shape Nigeria’s fuel market, with stakeholders closely watching how these dynamics will affect pump prices and overall energy costs in the coming weeks.

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In a verdict that underscores the U.S. government’s aggressive pursuit of international corruption, a California federal jury has convicted Paulinus Iheanacho Okoronkwo, a former top official of Nigeria’s state oil company, for accepting a $2.1 million bribe from a Swiss energy firm. The 58-year-old faces up to 25 years in prison when sentenced on December 1, 2025.

Okoronkwo, who once served as General Manager at the Nigerian National Petroleum Company Limited (NNPCL), was found guilty on multiple counts, including three counts of engaging in unlawful monetary transactions, one count of tax evasion, and one count of obstruction of justice. The conviction followed a four-day trial before Judge John F. Walter in the U.S. District Court for the Central District of California.

According to court filings, Okoronkwo received $2,105,263 in October 2015 from Addax Petroleum, the Geneva-based subsidiary of China’s state-owned Sinopec. Prosecutors said the transfer, disguised as a consultancy fee and routed through Okoronkwo’s law firm, was in fact a bribe to secure favourable financial terms from Nigeria’s state oil corporation.

The U.S. Department of Justice revealed that Addax Petroleum misclassified the payment as legal services, misled auditors, and dismissed executives who questioned the deal. The funds were channelled through a client trust account at Okoronkwo’s law firm before being used for personal transactions, including a $983,200 down payment on a house in Valencia, California, in 2017.

Investigators also established that Okoronkwo omitted the $2.1 million payment from his 2015 U.S. federal income tax return and later lied to federal investigators in 2022, claiming the funds were client money rather than income.

Under federal statutes, Okoronkwo faces up to 10 years in prison for each count of illicit monetary transaction, another 10 years for obstruction of justice, and five years for tax evasion. His sentencing hearing is set for December.

The case has drawn international attention, highlighting Washington’s resolve to prosecute cross-border corruption in the oil sector, particularly where foreign firms exploit weak governance to secure lucrative deals.

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The billionaire businessman, whose Lagos-based refinery is the largest in Africa, criticized the region’s export-driven crude oil model, noting that African nations are essentially outsourcing their economic future to foreign refiners.

“Every year, we hand over $90 billion to economies better positioned to refine our resources,” Dangote said. “This approach is stalling our industrial growth and exporting jobs we desperately need.”

Despite Africa’s rich hydrocarbon reserves, the continent refines only about 31% of its fuel needs, while 69% is imported, according to data from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Five leading West African economies—Nigeria, Ghana, Niger, Senegal, and Côte d’Ivoire—continue to import the bulk of their gasoline, despite having a combined refining capacity exceeding one million barrels per day.

Dangote highlighted the technical and regulatory challenges he faced in establishing the $19 billion refinery in Lagos, pointing out that procuring local crude remained a major hurdle. “Rather than selling directly to us, Nigerian producers preferred to deal with international traders, who in turn resold the crude to us at inflated prices,” he said. This situation, he added, forces the refinery to import crude from as far as the United States.

He also drew attention to logistical inefficiencies across Africa, revealing that transporting crude from one African country to another is more expensive than importing it from Asia. Compounding the problem, he said, are inconsistent fuel specifications across African nations, which complicate regional trade.

“The diesel refined for Nigeria cannot be sold in neighbouring countries like Ghana or Cameroon due to different quality standards. This lack of harmonisation only strengthens the grip of foreign fuel traders,” he noted.

In addition to the economic concerns, Dangote warned that Africa’s refining ambitions are under threat from the influx of low-cost, substandard fuel products, especially from Russia. “We must guard against the same fate that befell our textile industry—where dumping killed domestic production,” he said.

Despite the headwinds, Dangote said the Lagos refinery has already exported over one million tonnes of petrol since June and is preparing for a public listing. He called for unified political action across the continent to harmonise fuel standards, support local refining, and curb the influence of rent-seeking middlemen.

Also speaking at the conference, Farouk Ahmed, Chief Executive of NMDPRA, acknowledged the urgent need for reform, noting that the continent trades about 2.14 million metric tonnes of gasoline monthly, but produces only 610,000 metric tonnes locally.

Ahmed expressed optimism that upcoming refining projects—particularly in Nigeria—will shift the tide. The 2025 OPEC World Oil Outlook projects that Africa will add 1.2 million barrels per day in refining capacity by 2030, much of it from West Africa.

To boost market efficiency, Ahmed disclosed that the agency is working with S&P Global Commodity Insights to launch regional pricing indices tailored to West Africa, aiming to enhance pricing transparency and foster regional trade.

NNPCL’s Group Chief Executive Officer, Bayo Ojulari, echoed the concerns, describing the region’s dependence on fuel imports as “an existential threat” to both energy security and economic progress. He said Nigeria, with its strategic ports and growing regulatory capacity, is well positioned to emerge as a regional refining hub.

Meanwhile, the African Refiners and Distributors Association (ARDA) warned that more than 80% of refined fuels consumed in West Africa are still imported. ARDA’s Executive Secretary, Anibor Kragha, said the situation poses a threat to sovereignty and called for over $15 billion in downstream investments across the continent over the next decade.

“Let us not wait for outsiders to define Africa’s energy destiny,” Kragha said. “We must shape it ourselves—by Africans, for Africans.”

The conference closed with calls for accelerated reform, regional collaboration, and greater political will to secure Africa’s energy independence and reduce its reliance on imported petroleum products.

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In the July 2025 edition of the Lagos Business School Executive Breakfast Series, Rewane explained that Dangote Refinery’s decision to invest over ₦1.7 trillion annually in fuel logistics is a game-changing development. The distribution strategy includes 4,000 compressed natural gas (CNG) trucks to supply petrol and diesel directly to end-users.

Rewane noted that this approach will reduce pump prices, support small businesses, and ultimately curb inflation. As of May 2025, Nigeria’s headline inflation stood at 22.97 percent.

“With 4,000 CNG-powered trucks delivering fuel to the doorsteps of Nigerians, pump prices will drop, inflation will ease, and businesses will gain better access to energy,” Rewane stated in the FDC report.

Despite the positive economic outlook, the move has sparked concerns among fuel marketers and retailers. They argue that the direct-to-consumer model could lead to widespread job losses in the traditional fuel distribution chain.

Fuel prices in Nigeria have decreased over the past week. This trend is due to a global drop in crude oil prices and Dangote Refinery’s decision to reduce the ex-depot price of petrol from ₦880 to ₦840 per litre.

In response, the Nigerian National Petroleum Company Limited (NNPC) also reduced prices at its Abuja stations, adjusting pump prices from ₦945 to ₦910 per litre.

Dangote Refinery’s fuel distribution plan may signal a turning point for Nigeria’s energy sector. By lowering logistics costs, supporting small businesses, and reducing fuel prices, the strategy could help stabilize inflation and improve access to energy across the country.

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