Diesel price falls, Dangote Refinery supplies petrol products local market

Dangote Refinery has started supplying petroleum products to the local market, Reuters reports.

Devakumar Edwin, the Executive Director of the Dangote Group, confirmed the development on Tuesday, April 2, 2024.

“We have substantial quantities. Products are being evacuated both by sea and road. Ships are lining up one after another to load diesel and aviation jet fuel. Ships load a minimum of 26 million litres, though we try to push for 37 million litres vessels, for ease of operations,” Edwin told Reuters.

Speaking on the development, Abubakar Maigandi, the president of the Independent Marketers Association of Nigeria (IPMAN), said local oil marketers agreed on a price of ₦1,225 ($0.96) per litre of diesel following a bulk purchase agreement, before putting their mark-up.

He said members of the association control about 150,000 retail stations across the country.

Meanwhile, another group of marketers, the Depots and Petroleum Products Marketers Association of Nigeria are reportedly seeking letters of credit to buy petroleum products from Dangote.

The association’s executive secretary, Femi Adewole said members of the association are already discussing with banks to facilitate their business with the Dangote refinery.

“Our members are discussing with banks and these talks have reached advanced stages, when we have our letters of credit, we will begin lifting products,” Adewole was quoted as saying.

Recall that in January, the refinery announced its production of diesel and aviation fuel.

The facility, reputed as the largest single-train refinery in the world, is touted as a game-changer for Nigeria’s economy by helping to end the country’s reliance on imported fuel.

Nigeria currently relies on imported fuel and diesel due to the moribund state of state-owned refineries.

Diesel price falls

Meanwhile, the price of diesel has dropped from ₦1,700 per litre to around ₦1,350 as the refinery dispensed to marketers at between ₦1,225/litre and ₦1,300/litre depending on their volume of purchase.

Confirming this, Maigandi in an interview with ThePunch said the management of the refinery has assured marketers that more products would be released soon.

He said, “They are selling at ₦1,225/litre and the minimum volume they are giving is one million litres per marketer. Also, they assured us that they will release more products, but for now this (diesel) is what they are starting with. So we are expecting them to release PMS anytime from now.”

Maigandi maintained that the development would lead to a crash in diesel price, after its recent rise to a high of about ₦1,700/litre recently.

“The price of diesel is going to fall because of the release of products from Dangote refinery. In fact, it is already coming down in Lagos,” he said.

The IPMAN president added that the Dangote Refinery has been selling diesel to marketers since last week.