THE Nigerian Government has permitted oil marketers to start loading petrol directly from the Dangote Refinery, officially commencing the full deregulation of all petroleum products.
The announcement was contained in a statement on Friday, October 11, signed by the minister of finance and coordinating minister of the economy, Wale Edun.
It officially ends the sole off-taker arrangement the Nigerian National Petroleum Company Limited (NNPCL) has had with the refinery since September 15.
In the statement, Edun, the chairman of the naira-crude sale implementation committee, also gave an update on the takeoff of crude purchase and product sales in naira transactions.
“The committee is pleased to report a successful transition of operations in line with the directive issued by the Federal Executive Council. This directive has established a robust framework for local production and distribution of crude oil and refined products for local consumption in naira.
“Moving forward, petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of NNPC. Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency.”
According to Edun, with this mechanism now in full operation, along with the commencement of local production, Nigeria is well-positioned to transition to a fully deregulated market for all petroleum products.
He assured of government confidence that in the long term, the measures would create better market conditions for the benefit of all Nigerians.
Recent actions by the NNPCL have kept Nigerians wondering whether the downstream oil and gas sector has been fully deregulated as previously indicated by the government.
The state-owned oil company had on Wednesday, October 8, hiked the litre price of petrol across its retail outlets to N1,030, throwing up a lot of concern about full deregulation of the market.
This came after its September 4 pump price hike to N855, which resulted in an adjustment by oil marketers to above N1,000, which made transportation costs jump by over 50 per cent or more.
However, with the announcement of a fully deregulated market, an energy expert, Joe Nwakwue, told The ICIR that full deregulation would be attained only when market forces set prices and where there are market competitions.