In a significant development for Nigeria’s energy landscape, the Dangote Refinery in Lagos has commenced the sale of diesel to petroleum marketers across the country. This move has prompted a substantial drop in diesel prices, offering relief to consumers. Furthermore, the refinery has announced plans to start supplying petrol to the local market from May 2024, aiming to curtail Nigeria’s reliance on imported petroleum products.
The price of diesel has seen a notable reduction, plummeting from N1,700 per litre to approximately N1,350 per litre in various locations nationwide following the commencement of diesel sales by the Dangote Petroleum Refinery. The refinery, with its impressive $20 billion investment and a capacity of 650,000 barrels per day (bpd), began pumping diesel into the domestic market on Wednesday, March 27, 2023.
Reports indicate that the refinery has been proactive in its sales approach, ensuring equitable distribution among petroleum marketers. Each registered marketer has had access to a minimum of one million litres of diesel from the refinery. Officials and oil dealers have confirmed that the refinery has been retailing the product to marketers at prices ranging from N1,225 to N1,300 per litre, depending on the purchase volume.
Abubakar Maigandi, the national president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), affirmed that the refinery initiated diesel sales in late March. While some marketers have already received the product, IPMAN members are yet to commence lifting diesel from the facility. Maigandi disclosed that the company has fixed the selling price at N1,225 per litre, with a minimum purchase volume requirement of one million litres per marketer. He further revealed that additional volumes will be made available soon, suggesting a positive outlook for sustained market liquidity.
The decision to sell diesel directly to marketers is expected to have a cascading effect on diesel prices, potentially driving them down further. This move comes at a crucial time, especially considering that diesel prices surged as high as N1,700 per litre in February 2024.
Moreover, the Dangote Refinery has announced plans to extend its product portfolio by venturing into petrol supply starting from May 2024. This strategic move aligns with the refinery’s broader objective of reducing Nigeria’s dependence on imported petroleum products. With Africa’s largest refinery gearing up to supply petrol to the domestic market, Nigeria stands to benefit from enhanced energy security and reduced foreign exchange outflows.
In a bid to address concerns over feedstock shortages, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has directed crude oil supply to Dangote Refinery and other regional refining facilities in Nigeria. This directive underscores the government’s commitment to supporting indigenous refining capacity and bolstering the country’s energy independence.
As the Dangote Refinery takes bold strides in reshaping Nigeria’s energy landscape, stakeholders anticipate a transformative impact on the nation’s economy and energy sector dynamics.
