Many oil marketers /dealers have yet to start patronizing the Dangote refinery because they believe that the price of the product is higher than the one imported into the country.
Sources in the downstream sector of the petroleum industry claimed that the price of diesel from the refinery is higher than the price of diesel imported into the country.
Some of the associations of these marketers said they are still trying to see how they could meet the managers of the company and see if they, both parties, that is Dangote and the marketers can reach an acceptable price.
A WhatsApp message sent to Mr. Tony Chiejina, chief spokesperson of Dangote by Business Standards over a week ago on the matter is yet to be responded to.
However, they are optimistic that a solution will soon be provided regarding the matter.
Dangote refinery currently sells at N1,225/litre but the marketers want to drop the price further to make it available and affordable for Nigerians to buy. They stated that the product imported lands in Nigeria by some importers at N1,250/litre following the appreciation of the naira against the dollar.
To them, the Dangote refinery that produces diesel in Nigeria should cut down its price. A more acceptable according to some of the marketers would be between N700 and N800 per litre, because of the high cost of logistics required to transport the product from Lagos where the refinery is located.
According to the oil marketers, diesel produced at the Dangote refinery has no vessel cost, import charges, and other costs associated with the importation of the product into Nigeria.
Some marketers believe that some other expenses on the cost of diesel produced by the refinery have been waived. So those expenses should reflect on the price of the product. The refinery is in Lagos, so there is no vessel voyage cost and this should be deducted from the price Dangote is giving to marketers.
The PUNCH had reported on April 3, 2024, that the $20bn refinery started pumping out diesel to the domestic market the previous Wednesday (March 27, 2024).
The report stated that the refinery sold a minimum of one million litres to each registered oil marketer that got the product from the plant since it commenced diesel sale.
Officials of the multi-billion dollar plant and oil dealers had confirmed that the product was dispensed to marketers at N1,225/litre and N1,300/litre depending on the purchase volume.
The report stated that the refinery sold a minimum of one million litres to each registered oil marketer that got the product from the plant since it commenced diesel sale.
Officials of the multi-billion dollar plant and oil dealers had confirmed that the product was dispensed to marketers at N1,225/litre and N1,300/litre depending on the purchase volume.
The Naira, they said would be strengthened if the product is purchased domestically, minimise profiteering, and reduces the cost of goods and services that are transported using diesel. If you minus the cost spent on vessels, importation charges, and the cost of foreign exchange to some extent, the price of diesel will drop.
Officials of the multibillion-dollar refinery decided to stay mute despite several attempts to get their input on the matter.
However, a senior official at the Dangote refinery confirmed last week that the plant had started the sale of diesel to marketers, as the source noted that Premium Motor Spirit, popularly called petrol, would soon be released to the market.
“The product (diesel) is everywhere and they (marketers) are accessing it with ease. The product has been on sale to marketers since last week and the transactions have been better.
“The price of the product in various locations of the country will come down, and it is already coming down in many parts of Lagos since we started releasing products to marketers,” the official, who spoke on condition of anonymity due to lack of authorisation to speak on the matter, had stated.
The Dangote refinery has faced a series of hurdles as it strives to release refined products into the market after it was officially inaugurated by former President Muhammadu Buhari in May last year.
On February 8, 2024, The PUNCH reported that indications emerged that lingering regulatory approvals stalled Dangote Petrochemical Refinery’s plan to release aviation fuel (Jet A1) and diesel for sale in the Nigerian market in January.
The report stated that weeks after the January 31 timeline set by the management of Africa’s largest refinery to begin the sale of its petroleum product in the local market, the refinery was still battling to cross the hurdles of the several layers of regulatory approvals.
It stated that the development came after the refinery began the production of refined petroleum products at the expansive facility.
On January 12, 2024, Dangote refinery announced that it had commenced the production of Automotive Gas Oil, popularly called diesel, and aviation fuel or JetA1.
Aliko Dangote, in a statement issued by his firm at the time, thanked President Bola Tinubu for his support, encouragement, and thoughtful advice towards the actualisation of the project.
Dangote also thanked the Nigerian National Petroleum Company Limited, Nigerian Upstream Petroleum Regulatory Commission, NMDPRA, and Nigerians for their support and belief in the historic project, as he revealed that the facility would pump out diesel and aviation fuel in January, subject to regulatory approvals.
The refinery, Africa’s largest with a nameplate capacity of 650,000 barrels per day, was built on a peninsula on the outskirts of the commercial capital Lagos.
Nigeria has for years relied on expensive imports for nearly all the fuel it consumes but the $20bn refinery is set to turn it into a net exporter of fuel to other West African countries, in a huge potential shift of power and profit dynamics in the industry.
