Dangote Begins Petrol Production, Marketers Speculate Price ahead of Supply
- Petroleum marketers in Nigeria have expressed concern about the possible hike in petrol from the Dangote refinery
- The marketers say that since Dangote imports crude from abroad, higher production costs could lead to a price increase
- Dangote disclosed recently that the refinery will commence the production and sale of petrol in mid-July 2024
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Aliko Dangote, president of Dangote Industries Limited, disclosed last month that petrol from the Dangote refinery will be available in mid-July.
The Nigerian billionaire said there was a shift in production date due to some hitches experienced at the refinery.
Source: Getty Images
Dangote faces crude oil challenge
However, as petrol from the $20 billion facility is expected to hit the local market in two weeks, oil marketers have expressed concern that the product’s price may be higher than anticipated.
According to some sources, their fears stem from the lack of crude oil supply to the 650,000bpd-capacity refinery from international oil companies (IOCs), whom Dangote accused of trying to undermine his efforts.
Dangote has continued to import crude oil from the US and other countries at higher costs, making diesel and aviation fuel unattractive to local marketers due to pricing issues.
Punch reports that a marketer raised concerns that the price of crude imports would impact production costs, leading to a hike in petrol prices.
Marketers have hoped that the refinery would reduce the price of petrol, which increased from N200 per litre to over N600 after President Bola Tinubu removed the subsidy from the product.
There are fears that Dangote’s inability to access local crude may crush the hopes of Nigerians and marketers for cheaper petrol.
Marketers express fears of a hike in prices
Punch quoted Hammed Fashola, the national vice president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), as saying the association was scared that crude imports would hike the price of petrol from the Dangote refinery.
He reportedly disclosed that the refusal of IOCs to supply crude to Dangote would pose a massive challenge to the refinery.
The IMPAN official asked the Nigerian government to assist Dangote with crude supply to solve Nigerians' challenges with fuel availability and affordability.
He asked Dangote to refrain from monopolising the petroleum received if he received government support, saying the plant must sell petrol at an affordable price.
NNPC opens up on forcing customers to buy lubricants
Legit.ng earlier reported that the Nigerian National Petroleum Company Limited (NNPC) said Nigerians were not required to buy lubricants or engines as a condition for purchasing or dispensing fuel at its retail stations.
The NNPC also said it did not ask any of its attendants to demand from users to buy lubricants or engine oil as a condition for purchasing fuel.
NNPC’s chief corporate communications officer, Olufemi Soneye, disclosed this in a statement on Sunday, June 30, 2024.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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