Dangote Refinery to Export Petrol after Crashing Prices for Nigerian Marketers
- The Dangote Refinery has concluded plans to export over 200,000 metric tons of petrol following delayed orders by local marketers
- An executive at the refinery disclosed that the facility has signed its export orders for its petrol export and will begin dispatching when the ships arrive
- However, Dangote and independent marketers agreed to begin petrol lifting, which could lead to price reduction
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Dangote Refinery has agreed to export more than 200,000MT of its petrol, as local demand for more expensive, higher-quality products has disappointed many Nigerians.
An executive at the refinery disclosed this, saying that the mega refinery has signed its first export orders for its petrol and will begin dispatching the products immediately after the ships arrive.
Source: UGC
Dangote Refinery struggles to sell locally
The giant refinery has been touted as supplying Nigeria’s petrol demand and servicing about 340,000 barrels of local market, ending the country’s dependence on petrol imports.
According to S&P Global, since it began production in September and improved the quality of its fuel in October, rising prices have caused the refinery to struggle to shift its supply.
Nigerians have warned that petrol affordability has been challenged after price increases. At the same time, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said that demand could drop by a quarter yearly.
On October 29, 2024, Aliko Dangote complained the plant was wasting money holding over 500 million litres of petrol in storage as the company battled local marketers, blaming them for importing local-quality products to undermine its prices.
In November’s first week, the facility attempted to sell its first petrol abroad by issuing a public tender for the fuel type, but it later revoked the order.
Local marketers insist on petrol import
About three West African traders disclosed that the facility initially issued a tender to sell 40,000MT of petrol, two confirmed specific products with a sulphur content of 150 parts per million (PPM).
The mega plant has been in a face-off with local marketers who insist on petrol imports, saying that the refinery's price is too high.
Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) disclosed that the price the refinery intends to sell to marketers is higher than the imported product, vowing to import to crash petrol prices locally.
Dangote Refinery reaches deal with IPMAN
Meanwhile, the refinery reached a landmark deal with the Independent Petroleum Marketers Association of Nigeria (IPMAN) to begin lifting petrol.
Per details of the deal, the refinery agreed to sell the product at N990 per litre by trucks to the marketers and N940 by ships.
The marketers said that Nigerians should expect price reductions at the pumps in the coming weeks following the deal.
Petrol landing costs drop
Legit.ng earlier reported that the landing cost of Premium Motor Spirit, also known as petrol, in Nigeria, had fallen by 20.34% to N971,57 litres over the past three months.
The decline in landing costs, which shows the price of importing and distributing the product, shows some relief regarding global market fluctuations and supply chain factors.
Despite this reduction, the retail price of the commodity rose by N443 or 71.79% from N617 per litre on August 1, 2024, to N1,060 per litre by November 8, 2024.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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