Petrol Price to Hit N1,300 per Litre as NNPC’s Cash Crunch Bites

The Nigerian National Petroleum Company (NNPC) Limited’s financial strain may push petrol price to N1,300 per litre, as the company’s inability to subsidize the product persists.

The NNPC, which is the sole importer of petrol into Nigeria, has been grappling with financial constraints, leading to a shortage of the product. The company’s Group Managing Director, Mele Kyari, had earlier denied subsidizing petrol, but the company’s financial records show otherwise.

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According to industry sources, the landing cost of petrol has increased to N1,203 per litre from N720 per litre in October 2023. This, coupled with the NNPC’s financial strain, may lead to a hike in petrol price.

“It was almost inevitable for the pump price to remain the same, as this is one of the outcomes of a fully deregulated market,” said an independent oil marketer who preferred anonymity.

Tunji Oyebanji, the Chief Executive Officer of 11 Plc (formerly Mobil Nigeria), said selling below the landing cost is not sustainable. “If they sell at an economic price, perhaps others can import, supply will improve, and the financial strain will not be on them alone.”

The recent announcement that Dangote refinery has started producing petrol may provide relief to the NNPC, which is currently grappling with its international obligations to oil traders. However, industry experts say the refinery’s production may not be enough to address the current fuel scarcity.

READ ALSO: NNPC To Be Exclusive Buyer as Dangote Refinery Begins Petrol Production

As of Monday, most filling stations in Abuja and Lagos remained shut, forcing commercial motorists and private car owners to form long lines at the few outlets that are still operating. In Ikeja, Maryland, Ikorodu, and other parts of Lagos, petrol prices have soared to as high as N1,000 per litre.