Oil Dealers Call for Pricing Review Amid Dangote Refinery Discussions: Diesel at N850/Litre in Focus

Oil marketers are urging a price adjustment for Automotive Gas Oil, commonly known as diesel, produced by the Dangote Petroleum Refinery, proposing a range between N700 and N850 per litre. Marketers are set to meet with refinery management next week to discuss pricing strategies amid calls for government intervention.

The Independent Petroleum Marketers Association of Nigeria (IPMAN), representing the largest downstream marketing group, highlighted the need for a price reduction, emphasizing that the current N1,225 per litre price tag is excessive for domestically produced diesel. They argue that without expenses like vessel costs and import charges, Dangote refinery’s diesel should be more competitively priced.

Similarly, the Petroleum Products Retail Outlets Owners Association of Nigeria echoed IPMAN’s sentiments, urging refinery management to consider the logistical challenges involved in transporting the product from Lagos, where the refinery is located.

While acknowledging the refinery’s commendable efforts in producing refined products domestically, IPMAN’s National Public Relations Officer, Chief Chinedu Ukadike, emphasized the need for Dangote’s diesel to be priced lower than imported alternatives. He stressed that factors such as forex fluctuations and waived expenses should be reflected in the product’s pricing.

Marketers, under the umbrella of IPMAN and other associations, are preparing to submit their pricing requests to the Dangote refinery next week, with plans to seek government intervention if necessary.

The Dangote refinery, which commenced diesel sales to the domestic market on March 27, 2024, has faced regulatory hurdles in previous months, delaying its initial plans to release products. Despite challenges, the refinery remains committed to meeting Nigeria’s fuel demands and is poised to expand its product offerings to include Premium Motor Spirit (petrol) in the coming months.

Efforts to obtain comments from Dangote refinery officials were unsuccessful at the time of reporting. However, sources within the refinery confirmed the commencement of diesel sales and hinted at future releases of petrol, underscoring the refinery’s commitment to becoming a key player in Nigeria’s petroleum industry.

With Dangote refinery’s entry into the diesel market, stakeholders anticipate a shift in fuel dynamics, with hopes for increased competition and more affordable prices benefiting consumers nationwide.