Nigeria is considering allowing billionaire Aliko Dangote’s refinery to set gasoline prices, a significant shift from the current government-controlled pricing system.
This change is set to transform how fuel costs are regulated in the country.
Currently, Nigeria, Africa’s largest oil producer, imports all its gasoline and subsidizes the price, which has led to substantial annual costs.
However, with Dangote’s refinery near Lagos now beginning to refine gasoline locally, the government plans to permit Dangote to set the price for petroleum marketers starting next month.
Officials, who requested anonymity, revealed that while the state-owned NNPC Ltd. has been reselling gasoline below market value since August 2023 to control prices, it recently increased the price by 45% to 897 naira ($0.56) per liter to align more closely with market rates.
Government spokesman Temitope Ajayi stated that Dangote’s refinery will likely set prices based on market value, as it is a profit-driven business.
The petroleum industry regulator will focus on ensuring product quality and fair pricing to prevent exploitation.
This development comes amid severe gasoline shortages in Nigerian cities, exacerbated by debts incurred by NNPC due to subsidies.
NNPC has reported a 7.8 trillion naira ($4.9 billion) debt from the government for subsidies up to July.
Going forward, petrol marketers will have the option to purchase gasoline directly from Dangote’s refinery, which is expected to produce about 330,000 barrels per day at full capacity, potentially meeting over 1% of global gasoline demand and surpassing the entire requirement of the UK.
