LAGOS, Nigeria (VOICE OF NAIJA)-Oll marketers are advocating for a reduction in the pump price of Automotive Gas Oil (diesel) produced by the Dangote Petroleum Refinery, aiming for a range between N700 and N850 per litre.Ā
Discussions are set to take place next week between operators and refinery managers.
The Independent Petroleum Marketers Association of Nigeria (IPMAN), the largest downstream marketing association, recently voiced concerns over the high price of diesel produced by the indigenous Dangote Petroleum Refinery.
In an interview with The PUNCH, IPMAN highlighted that the current price of N1,225 per litre was excessive considering that the commodity is locally produced in Nigeria, and not being imported.
The Petroleum Products Retail Outlets Owners Association of Nigeria has joined the call for a reduction in the price of Dangote diesel. Both groups have appealed to the Federal Government for intervention and urged the refinery’s managers to take into account the high logistics costs involved in transporting the product from Lagos, where the refinery is situated.
The oil marketers highlighted that some importers are landing the product in Nigeria at N1,250/litre due to the naira’s appreciation against the dollar. They argue that this should compel the Dangote refinery, producing diesel domestically, to lower its price accordingly.
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The oil marketers emphasized that diesel produced at the Dangote refinery incurs no vessel cost, import charges, or other expenses typically associated with importing the commodity into Nigeria.
This development coincided with reports indicating that marketers represented by IPMAN, Independent Petroleum Marketers Association of Nigeria, and PETROAN convened separate meetings on Monday to discuss the pricing of petroleum products from the refinery and other related matters.
According to a report by The PUNCH on April 3, 2024, the $20 billion refinery began supplying diesel to the local market on March 27, 2024.
The refinery has been selling a minimum of one million litres to registered oil marketers, who have been purchasing the product at prices ranging from N1,225/litre to N1,300/litre, as confirmed by officials and oil dealers.
In an interview on Monday, the National Public Relations Officer of IPMAN, Chief Chinedu Ukadike commended the refinery for initiating the release of refined products.
However, he urged the refinery’s managers to lower the product’s cost, citing reasons why Dangote diesel should be cheaper than imported alternatives.
Ukadike said, āDuring the construction of the Dangote refinery, we supported and welcomed it. Also, it was our prayers that an indigenous refinery be opened so that it will limit the expenses of logistics in terms of importation, clearing, and other activities associated with bringing products into the country.
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āThese are some of the hurdles that necessitated the high cost of AGO or diesel being imported into Nigeria. So now that a private refinery with a very high capacity has started producing petroleum products here in Nigeria, we would have appreciated that its products being sold to Nigerians will be cheaper than the landing cost of imported products.
āThe dollar is currently about N1,270 to N1,290 and it is coming down. So if the dollar is a determinant factor in terms of the importation of petroleum products and diesel is sold by those companies that imported at N1,300/$, I believe that Dangote refinery should not measure the price of its diesel with the parameter of the forex.ā
The IPMAN PRO emphasized that the price of Dangote refinery’s diesel should not be determined solely by foreign exchange rates.
āAlso, some other expenses on the cost of diesel produced by the refinery have been waived. So those expenses should reflect on the price of the product. The refinery is in Lagos, so there is no vessel voyage cost and this should be deducted from the price Dangote is giving us.
āOther marketers who imported their products are landing it at between N1,200 and N1,250/litre since the drop in forex. So Dangote should be giving us his product at around N700 to N850/litre since he is producing it here.
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āWhen we buy at that price, it will further strengthen the naira, minimise profiteering and reduce the cost of goods and services that are transported using diesel. If you minus the cost spent on vessels, importation charges, and the cost of foreign exchange to some extent, the price of diesel will drop,ā Ukadike stated.
He mentioned that oil marketers are preparing to present their pricing proposals to the Dangote refinery the following week, and IPMAN intends to seek government intervention regarding the issue.
āWe are trying to seek a meeting with the refineryās commercial department. I just came out of a meeting to speak with you, where we are discussing how to be able to persuade them to review their prices and also ask the government to intervene,ā he said.
When asked to state when the association would meet with the refinery, Ukadike replied. āBy next week we should get an appointment. That should be after the Sallah.ā