The Dangote Petroleum Refinery has made a significant impact on the price of diesel, resulting in a notable drop in various locations across the country. The refinery, valued at $20 billion, commenced the sale of diesel to registered oil marketers last week, selling a minimum of one million litres to each marketer at prices ranging between N1,225 and N1,300 per litre, depending on the purchase volume.
This development comes as encouraging news for consumers who have been grappling with high diesel prices, which recently reached as high as N1,700 per litre. The influx of products from the Dangote refinery has already caused prices to decrease in Lagos and is expected to bring about a further reduction nationwide.
According to Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), the release of diesel from the Dangote refinery will undoubtedly result in a crash in diesel prices. Maigandi further revealed that the refinery is scheduled to begin supplying Premium Motor Spirit (PMS), commonly known as petrol, to the domestic market in May this year.
Dr Ralph Arokoyo, the Chief Executive of AF Ralph Oil and Gas Ventures, confirmed that the refinery has commenced the sale of diesel to dealers, including members of IPMAN and the Major Energy Marketers Association of Nigeria (MEMAN), as well as other registered independent dealers. Arokoyo emphasized that the prices are currently ranging between N1,250 and N1,300 per litre, depending on the purchase volume, which is considerably lower than the prevailing market rates.
It is worth noting that Dangote refinery officials have also confirmed the sale of diesel and expressed their intention to release petrol soon. The availability of diesel from the refinery has already had a positive impact on prices, with reductions observed in many parts of Lagos.
The journey for Dangote Petroleum Refinery has not been without challenges. After its official inauguration in May of last year, the refinery faced delays in obtaining regulatory approvals for the sale of aviation fuel (Jet A1) and diesel. However, the refinery’s production of refined petroleum products has now commenced, marking a significant milestone in its operations.
Dangote refinery’s production capacity of 650,000 barrels per day positions Nigeria to become a net exporter of fuel to other West African countries, potentially altering the power dynamics and profit landscape in the industry. With the refinery’s diesel supply already making a substantial impact on prices, consumers can anticipate further reductions as more products from the plant are introduced to the market in the coming weeks.
It appears that the Dangote Petroleum Refinery has indeed started exporting its refined products. The refinery issued tenders to sell two fuel cargoes for export, marking its first sales of refined products. The cargoes included low-sulfur straight run fuel oil and naphtha.
Nigeria, which has traditionally relied on expensive fuel imports, is expected to undergo a significant shift as the Dangote refinery aims to transform the country into a net exporter of fuel to other West African nations. This development could potentially reshape the power dynamics and profit landscape in the industry.
Regarding the diesel prices in Nigeria, it seems that there are varying rates in different locations. As of now, the pump price of diesel ranges between N1,420 and N1,500 in Ogbomoso, Oyo State. In Badagry, Lagos State, it is sold at approximately N1,395 in some areas and N1,450 in others. These prices may fluctuate further depending on market conditions and the availability of products from the Dangote refinery.