No More N1,200 Per Litre: Dangote Crashes Diesel Price For Marketers By 16.6 Per Cent
- The price of diesel from the Dangote Refinery has now been reviewed from N1,200 to a new record of N1,000 per litre
- This came as marketers advocated that Dangote Petroleum Refinery's diesel pump price be reduced to a range of N700 to N850 per litre
- Before the refinery began production, the product was sold at a high cost due to foreign exchange issues and market situations
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
In an effort to boost Nigeria's internal economy, the $20 billion Dangote Petroleum Refinery has reduced the price of fuel by 16.6% to N1,000 per litre from N1,200 per litre.
Source: UGC
For several months, the price of diesel was comparatively elevated, mostly because of the product's importation from the worldwide market and the corresponding foreign exchange problem.
But in a statement, Vanguard reported that the refinery announced a further reduction of the price of diesel from N1200 to N1,000 per litre.
It stated:
“While rolling out the products, the refinery supplied at a substantially reduced price of N1,200 per litre three weeks ago, representing over 30 per cent reduction from the previous market price of about N1,600 per litre."
“This significant reduction in the price of diesel at Dangote Petroleum Refinery is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country.”
Operators call for price review
Mohammed Shuaibu, the secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abuja-Suleja branch, responded to the price cut on Tuesday.
He said:
“This is a welcome development, and I am happy to hear this news because it will further increase competition downstream, which will benefit many Nigerians.
“Such competition would create room for more price reduction and we are going to start seeing the positive impact on the cost of goods and services on the long run.”
On April 10, 2024, the marketers demanded that Dangote Petroleum Refinery's diesel pump price be reduced to a range of N700 to N850 per litre. Plans to meet with the refinery management were also disclosed by the operators.
The Nigerian Petroleum Products Retail Outlets Owners Association also demanded a drop in Dangote diesel's price.
The groups told the refinery's managers to consider the high cost of logistics involved in transporting the product from Lagos, the refinery's location and called for the federal government to step in.
The oil marketers noted that some importers are bringing the product into Nigeria at a rate of N1,250 per litre as a result of the naira's strengthening against the dollar.
They added that this should be an additional justification for the Dangote refinery, which makes diesel in Nigeria, to lower its prices.
The oil marketers claim that there are no import duties, vessel costs, or other expenses related to importing diesel into Nigeria when it is produced at the Dangote plant.
Samuel Oyekanmi, a research and insight associate with Norrenberger Financial Group said that although the recent downstream oil sector deregulation appears like an area that would improve the level of transparency and, by extension, activities in the downstream oil sector, there is still a lot to be done in terms of oil extraction and refining before we will still have impressive growth in the oil sector.
He said,
"The full implementation of Dangote Refinery is a potential growth propeller. However, it will take time before we start seeing the full impact on the economy."
FG gives new instruction on oil sale
Legit.ng also earlier reported that the federal government announced that indigenous refineries can now buy crude oil in naira or dollars.
The government disclosed this through the Nigerian Upstream Petroleum Regulatory Commission(NUPRC) at a briefing in Abuja on Monday, April 16, 2024.
According to NUPRC, entities like the Dangote refinery and other modular refineries across the country must now decide which currencies to use to pay for crude oil.
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Source: Legit.ng
