The state-owned NNPC is the only purchaser of gasoline from Nigeria's 650,000 b/d Dangote refinery, which has started selling the fuel domestically. For September's gasoline deliveries, NNPC pays Dangote in US dollars; beginning in October, a crude-for-gasoline swap will be conducted and settled in naira.
The retail price of gasoline in Lagos is N950.22/l, which reflects recent price increases brought on by a reduction in government subsidies. The refinery sets its ex-refinery price for gasoline at 6/t, or 898.78 naira/litre (The refinery sets its ex-refinery price for gasoline at $736/t, or 898.78 naira/litre ($0.55/l)..55/l). Under Nigeria's Petroleum Industry Act, the price of gasoline is directly negotiated between parties.
NNPC believes that the move by the dangote refinery will lessen her dependence on imported fuel.
The refinery is still increasing production even though its goal is to meet local demand; during the weekend, it produced 16 million liters, a far cry from its 57 million liters per day maximum capacity.
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