Dangote Refinery: Fueling Nigeria's Economic Resurgence or Monopoly Menace?

Dangote Refinery Raises Diesel Prices To N1,100 Amid Naira’s Decline

3 weeks ago
1 min read

Dangote Petroleum Refinery has increased the price of its Automotive Gas Oil (diesel) from N940/litre to N1,100/litre due to the recent depreciation of the naira against the US dollar.

The refinery’s decision, announced recently, reflects ongoing challenges in Nigeria’s energy market.

“We had earlier reduced the price of diesel to N940/litre, but due to the exchange rate, we’ve had to adjust,” said Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria.

The naira’s recent fall against the dollar has exacerbated costs for imported goods, including crude oil, which Dangote Refinery processes. This increase comes just weeks after the refinery had briefly lowered diesel prices in response to market pressures.

“The refinery imports crude oil, and with the dollar rising, it affects the prices we see here,” explained Chief Ukadike Chinedu, National Public Relations Officer of IPMAN.

In recent months, the naira had shown signs of strength against the dollar, but these gains proved short-lived, reversing the positive impacts seen earlier in the year. Industry observers had noted a brief period of stability before the naira began to weaken again, surpassing N1,400/$ in May.

READ ALSO: I Need 35 Visas To Travel Around, Dangote Decries African Travel Restrictions

The refinery’s operational decisions are closely watched, given its role as a major player in Nigeria’s energy sector. Recently, it announced plans to significantly increase its intake of US crude oil to meet the growing demand for refined products.

“Bloomberg reported that the refinery plans to purchase two million barrels of crude monthly, starting July, which shows their commitment to ramping up production,” a report stated.

Despite the diesel price increase, there is optimism surrounding the refinery’s future production of Premium Motor Spirit (petrol). Aliko Dangote, President of Dangote Group, indicated plans for the refinery to begin domestic petrol production soon, potentially eliminating Nigeria’s need for petrol imports by June.

“Nigeria shouldn’t import any gasoline by next month,” Dangote stated, highlighting the refinery’s potential to reshape Nigeria’s energy landscape.

Oil marketers have welcomed this development but are cautious about pricing. They hope that Dangote Refinery will offer petrol at competitive rates compared to the Nigerian National Petroleum Corporation’s current prices.

“We expect a price below NNPC’s rate of N565.50/litre, ideally around N500/litre,” Maigandi remarked, indicating ongoing discussions with the refinery on future pricing structures.

As Nigeria navigates fluctuating exchange rates and energy market dynamics, Dangote Refinery’s decisions will continue to influence both domestic fuel prices and broader economic trends.


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