The cost of diesel produced by Dangote Petroleum Refinery has surged from N940 per litre to N1,100 per litre, driven by the recent depreciation of the naira against the US dollar, industry sources revealed on Tuesday.
This price increase follows an announcement on April 24, 2024, when the refinery reduced the prices of diesel and aviation fuel to N940 and N980 per litre, respectively. Just a week earlier, on April 17, the refinery had responded to appeals from oil marketers by cutting the diesel price from N1,200 per litre to N1,000 per litre, offering further reductions for bulk purchases of five million litres or more.
The latest hike in diesel prices, confirmed by the Independent Petroleum Marketers Association of Nigeria (IPMAN), reflects the impact of the naira’s depreciation. “The refinery had earlier reduced the price of its diesel to around N940 per litre, but it later increased it up to N1,100 per litre,” said Abubakar Maigandi, National President of IPMAN. He attributed the price hike to the rising exchange rate.
Despite multiple attempts, Dangote Refinery officials declined to comment on the price changes. However, industry insiders and major marketers corroborated the information, citing the naira’s instability as a key factor. “The recent crash of the naira against the dollar is pushing up the cost of commodities, including diesel from Dangote refinery,” explained Chief Ukadike Chinedu, National Public Relations Officer of IPMAN. He noted that since the refinery imports crude oil priced in dollars, fluctuations in the exchange rate directly influence the cost of refined products.
In March and April, the naira experienced a temporary appreciation against the dollar, which had a marginal positive effect on commodity prices. On April 16, 2024, The PUNCH reported that the naira had appreciated to N1,136 per dollar in the official market and N1,050 per dollar in the parallel market, following several foreign exchange directives by the Central Bank of Nigeria (CBN) aimed at stabilizing the currency. However, this improvement was short-lived as the naira soon began to decline again.
Throughout May, the naira has consistently traded above N1,400 per dollar. For instance, on May 8, 2024, reports indicated that the naira was bought at N1,400 and sold at N1,425 per dollar, highlighting the ongoing volatility.
The Dangote Refinery, a $22 billion facility located in Epe, Lagos, relies heavily on imported crude oil, with recent reports indicating plans to purchase millions of barrels of US crude oil to bolster its operations.
