Petroleum product marketers in Nigeria have raised concerns with President Bola Tinubu regarding the impact of Dangote Refinery’s reduced diesel price on their businesses. The local price of diesel has reportedly dropped to N900 per litre, which marketers argue is adversely affecting their operations.
Challenges Faced by Dangote Refinery
Devakumar Edwin, Vice President of Dangote Industries Limited, addressed these issues during a Twitter Spaces session hosted by Nairametrics. Edwin revealed that the refinery, situated in the Lekki Free Zone near Lagos, has been facing difficulties in selling its diesel locally. The refinery is currently only able to sell around 29 tankers of diesel per day due to low demand from local importers, leading it to export a significant portion of its diesel and aviation fuel.
Despite these challenges, Edwin noted that the refinery’s production capacity is substantial enough to meet 44% of Nigeria’s local petrol demand. The Dangote Refinery, with a capacity of 650,000 barrels per day, began exporting naphtha in March, low-sulphur straight run fuel oil (LSSR) in May, and has been selling diesel and jet fuel domestically since April.
Impact on Local Market
Marketers are concerned that the low local pricing of diesel by the refinery undermines their business viability, prompting their appeal to the President. This situation highlights the broader implications of pricing strategies and their effects on local and international market dynamics.
