Petroleum product marketers in Nigeria have reportedly submitted a letter to President Bola Tinubu, expressing concerns that the recent drop in Dangote Refinery’s diesel price to N900 per litre is adversely impacting their businesses.
Devakumar Edwin, Vice President of Dangote Industries Limited, shared this information during a Twitter Spaces session hosted by Nairametrics.
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“Petroleum product marketers in Nigeria have written to President Bola Tinubu to complain that the refinery local prices which have dropped from N1,200 to N1,000 and now N900 per litre are impacting their businesses negatively,” he said.
Edwin outlined several challenges confronting the Dangote Refinery and their effects on Nigeria’s fuel supply and pricing.
He noted that the refinery, situated in the Lekki Free Zone near Lagos, is having difficulty selling approximately 29 tankers of diesel per day because of reduced demand from local petroleum product importers.
“As a result of this poor local patronage, the refinery exports most of its diesel and aviation fuel,” he said.
Edwin had previously indicated that if the Nigerian National Petroleum Company Limited and other local petroleum dealers do not purchase products from Dangote Refinery, the refinery would turn to exporting its products.
”We have been exporting aviation fuel, we have been producing kerosene, we have been producing diesel, but yesterday, we started the production of PMS. So, that was the last stage. The only thing now left out is petrochemicals.”
“So, the good news for the country is we have started producing PMS from our refinery,” he had said on a radio programme.
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Asked if the petrol would be sold locally, Edwin replied, “Well, I explained how there has been a kind of a blockade from lifting our products within the country. The traders have been trying to block (it), and so now we have been exporting our petroleum products. PMS, we are ready to pump in as much as possible to the country.
“But if the traders or NNPC are not buying the product, obviously, we will end up exporting the PMS as we are doing with the aviation jet and diesel,” he declared.
Edwin expressed surprise at the unexpected challenges the company encountered as the refinery began operations.
He reflected on the original philosophy of adding value to the country’s raw materials, lamenting that, despite over three decades, Nigeria still exports crude oil and imports refined petroleum products.
“The philosophy is to take the crude, and instead of exporting the crude, refine it, add value; export the finished products, and supply the finished products locally. But unfortunately for us, we started facing challenges with the crude supply.
“What is happening today? We are struggling to get the crude. We are now importing the crude from the US, we are importing from Brazil, and from other parts of the world. So, the whole philosophy has gone upside down. After all these decades, we are exporting crude, importing products,” he added.
“The same thing is continuing. We are not getting enough crude allocation, and the crude is still being exported. We are forced to import crude from outside. Yes, we are getting some crude locally, but it’s not adequate.”
Dangote Refinery, which has a capacity of 650,000 barrels per day, began exporting naphtha in March and low-sulphur straight-run fuel oil (LSSR) in May.
The refinery started domestic sales of diesel and jet fuel in April and began exporting diesel fuel that meets European specifications in June.
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