Nigeria's state-owned oil firm NNPC Ltd said on Saturday it will not be the sole buyer of gasoline from Dangote refinery but would step in if the facility sold above pump prices.

CONTEXT

The 650,000 barrel-per-day capacity Dangote refinery started producing gasoline earlier this week, raising expectations that this would end decades of the country relying on imports, which cost billions of dollars annually.

The refinery had said NNPC would be the sole buyer of its petrol, also known as premium motor spirit (PMS) and that the government would set prices.

WHY IT'S IMPORTANT

However, NNPC said in a statement that Dangote would determine the price of its gasoline and could sell directly to marketers, who buy in bulk and distribute to fuel stations.

Until now, NNPC was sole importer of gasoline into Nigeria.

BY THE NUMBERS

NNPC earlier this week hiked the price of petrol from an average 617 naira ($0.3905) a litre to 855 naira.

Dangote will initially supply 25 million litres of gasoline daily into the domestic market this month, increasing to 30 million litres from October.

KEY QUOTE

"The NNPC Ltd. will only fully offtake PMS from the DRL (Dangote Refinery Ltd) if the market prices of PMS are higher than the pump prices in Nigeria," NNPC said.