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Dealers demand N850/litre diesel as Dangote, marketers meet

Ademola Damilola by Ademola Damilola
April 10, 2024
in Business, In the News
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Dealers demand N850/litre diesel as Dangote, marketers meet
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Oil marketers are advocating for a reduction in the pump price of Automotive Gas Oil (diesel) produced by the Dangote Petroleum Refinery. They suggest a price range between N700 and N850 per litre, in light of planned discussions with refinery management.

Independent Petroleum Marketers Association of Nigeria (IPMAN), the largest downstream marketing association, expressed concern over the high price of diesel from the indigenous refinery, citing its production within Nigeria rather than importation as the reason for its expensive price tag.

Additionally, the Petroleum Products Retail Outlets Owners Association of Nigeria called for a review of the price, considering the significant logistical costs involved in transporting the product from Lagos, where the refinery is situated.

Oil marketers highlighted that imported diesel, influenced by the exchange rate, is now priced around N1,250 per litre, making the Dangote refinery’s product comparatively expensive. They emphasized that the locally produced diesel does not incur vessel costs or import charges, factors that should lower its price.

During a meeting, the oil marketers discussed the pricing of petroleum products from the refinery and resolved to engage with its commercial department for a potential price adjustment. They intend to seek government intervention if necessary.

The Dangote refinery recently commenced the sale of diesel to marketers, marking a significant development in the petroleum market. However, despite repeated attempts, officials of the refinery declined to comment on the pricing issue.

In January, the refinery announced the commencement of diesel and aviation fuel production, expressing gratitude to stakeholders for their support. However, regulatory approvals delayed the release of these products into the local market.

The refinery’s production capacity of 650,000 barrels per day positions Nigeria to become a net exporter of fuel to West African countries, potentially reshaping the regional fuel market dynamics.

While the refinery prepares to deliver its first fuel cargoes to the domestic market, oil marketers continue to push for a more affordable price for diesel, citing factors such as local production and reduced logistical costs.

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