NNPC increases petrol price in Abuja, Lagos amid Naira-for-Crude deal stalemate

The Nigerian National Petroleum Company (NNPC) Limited has raised the pump price of premium motor spirit (PMS), commonly known as petrol, to N950 per litre in Abuja, marking a significant N70 increase from the previous price of N880 per litre.

The price hike, which took effect on Thursday, was observed at NNPC retail outlets, including the Federal Housing station in Kubwa. In Lagos, petrol prices also surged to N925 per litre, up from N860 per litre, at major filling stations such as those along Ago Palace Way and Second Rainbow.

Price Hike Follows Dangote Refinery’s Suspension of Naira Sales

The latest increment comes amid ongoing disruptions in Nigeria’s fuel supply chain, following Dangote refinery’s recent decision to temporarily halt the sale of petroleum products in naira. This suspension arose after negotiations on the naira-for-crude oil deal stalled, creating uncertainty in domestic fuel pricing and supply.

On March 19, Dangote refinery explained that halting naira sales was necessary “to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars.”

The refinery had initially agreed to sell refined petroleum products in naira starting October 1, 2024, as part of a broader strategy to reduce Nigeria’s dependence on fuel imports, cut costs, and stabilize pump prices. However, the halt in sales has now led to widespread fuel price adjustments at retail stations across the country.

NNPC’s Naira-for-Crude Agreement Faces Uncertainty

Further complicating the situation is the NNPC’s decision to suspend its naira-for-crude deal until 2030, citing the forward sale of all its crude oil. This has created a supply gap, leading to speculation and increased fuel costs.

Despite this suspension, the NNPC has assured Nigerians that discussions are ongoing for a renewed naira-for-crude agreement with Dangote refinery, as the existing contract expired at the end of March.

Public Concerns Over Rising Fuel Prices

The latest petrol price hike has triggered concerns among Nigerians, as transportation and living costs are expected to rise further. Many are calling on the government to urgently resolve the impasse and stabilize fuel supply to prevent further economic strain.

With negotiations between NNPC and Dangote refinery still ongoing, the fate of petrol pricing in Nigeria remains uncertain, leaving consumers bracing for potential further increases in the coming weeks.