Nigeria’s state oil company, NNPC Ltd, raised petrol prices by 11% on Monday, marking the second hike in two weeks. The increase comes a day after the firm began sourcing fuel from the newly operational Dangote oil refinery, located on the outskirts of Lagos.
The Dangote refinery, with a capacity of 650,000 barrels per day, is expected to put an end to Nigeria’s long-standing reliance on gasoline imports. For decades, gasoline imports were heavily subsidized until President Bola Tinubu initiated subsidy removals shortly after assuming office in May last year.
The price of petrol is a crucial issue for Nigerians, as a large portion of the population relies on generators powered by gasoline due to inconsistent access to the national electricity grid. On Monday, NNPC announced the new petrol prices, raising them from 858 naira ($0.53) per litre to 950 naira in Lagos, with prices soaring to 1,019 naira in the northeastern region. The company revealed that it is purchasing fuel from the Dangote refinery at 898 naira per litre.
NNPC also noted that it has begun purchasing fuel from Dangote in U.S. dollars, though a deal to pay in the local naira currency is still pending.
This latest price hike is likely to fuel public dissatisfaction, as Nigerians are already grappling with an inflation rate of 33.4%. The surging cost of transportation and the overall cost of living crisis have sparked violent protests, most recently in early August.
Last Friday, a Nigerian presidential committee announced that NNPC would begin distributing fuel from the $20 billion Dangote refinery, resolving a previous impasse that had delayed distribution.
Starting in October, NNPC will supply 385,000 barrels of crude oil per day to the refinery, with payments made in naira. In turn, Dangote will sell its refined fuel in the local currency, marking a significant shift in Nigeria’s fuel market dynamics.