Local petroleum marketers have complained to President Bola Tinubu over the Dangote refinery’s pricing, claiming it has negatively impacted their business.
Dangote Refinery, with a daily production capacity of 650,000 barrels, has seen low local demand for its petroleum products, prompting the company to consider alternative markets abroad.
Reports reveal that the marketers are unhappy with the Refinery’s decision to lower its diesel price from ₦1,200 per litre to ₦900, which they argue undercuts their operations.
Despite offering competitive prices, Dangote Refinery struggles to sell its diesel locally, managing only about 29 tankers per day. In light of this, most of the refinery’s diesel and jet fuel is exported.
Devakumar Edwin, vice president of Dangote Industries Limited, highlighted these issues during a recent media interaction.
He explained that the reluctance of local marketers to purchase products has forced the refinery to look beyond Nigerian borders, exporting diesel that meets European standards.
Edwin also confirmed that petrol production had commenced at the refinery, with further plans to increase local supply if demand rises. However, if Nigerian marketers or the Nigerian National Petroleum Company Limited (NNPCL) fail to lift the products, Dangote Refinery will have no choice but to continue exporting, as it currently does with other petroleum products.
The refinery’s initial vision, as Edwin noted, was to reduce Nigeria’s reliance on imported petroleum by refining crude oil locally. However, the company has faced challenges in securing crude for its operations.
According to Edwin, the refinery now imports crude from countries such as the United States and Brazil, as domestic supply is insufficient. This shift in strategy undermines the refinery’s original goal of refining and distributing locally sourced crude oil to meet Nigeria’s demand.
Edwin frowned at the unexpected challenges, especially considering the refinery was designed to bolster Nigeria’s economy by adding value to local crude. He stated that despite the facility’s capabilities, Nigeria continues to export crude oil and import refined products, a cycle that has persisted for decades.
He reiterated that while Dangote Refinery is ready to supply the Nigerian market, it will prioritise international buyers if local players do not engage.
In March, Dangote Refinery began exporting naphtha, followed by low-sulphur fuel oil in May, and started selling diesel and jet fuel domestically in April.
By June, it had started exporting diesel compliant with European regulations, further reflecting its pivot towards international markets due to inadequate domestic patronage.
