Petroleum products marketers across Nigeria have submitted a formal petition to President Bola Tinubu, calling for intervention in a growing conflict with Dangote Refinery over diesel pricing.
The marketers are concerned that the recent significant drop in diesel prices at the refinery; from N1,200 to N1,000 and now N900 per litre; is adversely affecting their business operations.
The development was highlighted by the Vice President of Dangote Industries Limited, Devakumar Edwin, during a Twitter Spaces session hosted by Nairametrics.
Edwin revealed that the refinery’s drastic price reduction has led to a considerable negative impact on local marketers, who have now sought the President’s assistance to address the issue.
According to Edwin, Dangote Refinery struggles to sell approximately 29 tankers of diesel daily due to insufficient demand from local importers. Consequently, the refinery has been increasingly relying on exports for its diesel and aviation fuel. Edwin warned that if local entities like the Nigerian National Petroleum Company Limited (NNPCL) and other buyers do not boost their demand, the refinery will be compelled to export a larger proportion of its products.
The refinery’s pivot towards exporting stems from the broader challenges faced in the domestic market. Edwin also mentioned that while the refinery has recently begun producing Premium Motor Spirit (PMS), the overall market conditions remain challenging. He stated, “We have now entered the final stage of our refining process with PMS production. However, if local traders and NNPC do not increase their purchase volumes, we will have no choice but to continue exporting PMS along with aviation fuel and diesel.”
The original goal of Dangote Refinery was to enhance Nigeria’s economic self-sufficiency by refining crude oil domestically and supplying both local and international markets with refined products. Edwin expressed frustration that this goal is undermined by the ongoing situation where Nigeria continues to export crude oil and import refined products. He lamented the ongoing issue of inadequate crude oil allocations, which has necessitated imports from countries such as the US and Brazil.
“This situation is disheartening,” Edwin said. “We aimed to refine and add value to our crude oil domestically. Instead, we find ourselves importing crude while exporting refined products. Despite efforts to source crude locally, the allocation remains insufficient, forcing us to look internationally.”
In light of these concerns, petroleum products marketers are appealing to President Tinubu for a resolution that balances the interests of Dangote Refinery with those of local businesses. Addressing these issues is crucial for stabilizing the Nigerian petroleum market and ensuring that the refinery can effectively contribute to the country’s energy sector.
Credit: The Sun