Concerns Over FAAC Remittance As NNPC Slashes Petrol Price to N860 Per Liter, Intensifying Competition With Dangote Refinery

In a new decision that intensified the Nigeria Essence Prix War, the national Nigerian Petroleum Company Limited (NNPC) reduced the price of the high -end engine pump (PMS) to N860 per liter.

The new price, as of Monday, marks a significant drop in relation to the previous average of N920 per liter, bringing a certain relief to millions of Nigerians struggling with the high cost of living.

The price reduced by NNPC, the largest fuel supplier in the country, follows a similar decision by Dangote Petroleum Refinery and Petrochemicals Limited, which reduced its ex-prix of N890 petrol per liter per liter to N825 last week. This marked the second reduction in Dangote prices in February, causing a competitive price wave among private marketing specialists.

Dangote, in a public opinion, has listed its prices of its partner in selected filling stations in Lagos, with Mme Vendant of petrol at N860 per liter, and AP and Heyden at N865 per liter. These movements not only intensified competition, but also put pressure on the NNPC to adjust its pricing strategy to maintain its market share.

However, while Nigerians express the enthusiasm of lower prices, analysts raise concerns concerning potential repercussions, in particular concerning the financial obligations of the NNPC towards the Committee for the Allowance of the Federation accounts (FAAC).

“The problem with this format is that the NNPC will retain money that they are supposed to pay on the account of the federation. They cannot justify this reduction because most of their products are imported and the landing cost remains N927, “said Johnson Kio.

Before now, economists have expressed their concern that the price reduction of the NNPC could have a negative impact on its sending of funds on the FAAC, where the company would have fought with consistency. This apprehension stems from the fact that the rehabilitated refinery of Port Harcourt has not yet completely started its operations, which means that the NNPC always depends strongly on the import of fuel to meet domestic demand.

The data from the January 2025 report of oil tankers highlight this dependence, showing that the NNPC imported 212,870 340 liters of petrol to the ports of Calabar and Lagos. With the cost of landing for petrol products culminating at N927 per liter a few weeks ago, analysts question the economic viability of the last price drop from the NNPC.

The FAAC fund of the NNPC is essential for the budgetary stability of the Nigeria, because the federal, state and local governments are based on these funds for budgetary allowances. Any deficit could cause disruption of public sector financing, including wages and infrastructure projects.

Although price reduction has been greeted by many, skepticism remains high. Many Nigerians recall past experiences where temporary price reductions were quickly followed by net hiking, often with a minimum explanation.

The aggressive decline in NNPC prices seems to be a strategic response to maintain its domination in the downstream market. However, given its dependence on imports and high landing fees, this decision can have financial implications for the state -owned company.

Energy experts argued that the current price reduction could deepen this inconsistency, especially if the company continues to sell petrol at a loss.

Many believe that the sustainability of this price drop will depend on the speed with which the Harcourt port refinery can be online and reduce dependence on importation. Without local refining capacity, the NNPC could find itself in a precarious financial situation.

For Nigerians, any reduction in petrol prices has a direct impact on the cost of transport and goods. However, if the drop in NNPC prices is not economically durable, this could lead to a new cycle of market instability.

Market observers also warn that lower prices could cause fuel shortages if the NNPC is unable to maintain import volumes at the current pricing level.

“” Under the recovery “,” lower margin “,” energy safety cost “and other grammars will begin soon,” noted Dr Fo Ehiagwina.