Dealers demand N850/litre diesel as Dangote, marketers meet

Oil marketers have called for a downward review in the pump price of the Automotive Gas Oil, popularly called diesel, being produced by the Dangote Petroleum Refinery to between N700 and N850/litre, as operators plan to meet managers of the refinery next week.

The largest downstream marketing association, the Independent Petroleum Marketers Association of Nigeria, which made the call in an interview with The Punch, said the N1,225/litre diesel price from the indigenous refinery was high because the commodity was produced in Nigeria and not imported.

The Petroleum Products Retail Outlets Owners Association of Nigeria also called for a reduction in the price of Dangote diesel.

The groups called for the intervention of the Federal Government and urged the managers of the refinery to consider the high cost of logistics required to transport the product from Lagos where the refinery is located.

The oil marketers pointed out that the product is being landed in Nigeria by some importers at N1,250/litre following the appreciation of the naira against the dollar, adding that this should be another reason why the Dangote refinery that produces diesel in Nigeria should cut down its price.

According to the oil marketers, diesel produced at the Dangote refinery has no vessel cost, import charges, and other costs associated with the costs associated with the importation of the commodity into Nigeria.

This came as it was gathered that the marketers under the aegis of IPMAN and Independent Petroleum Marketers Association of Nigeria, and PETROAN held separate meetings on Monday to deliberate on the pricing of petroleum products from the refinery, as well as other issues.

It was reported on April 3, 2024, that the $20bn refinery started pumping out diesel to the domestic market the previous Wednesday (March 27, 2024).

The report stated that the refinery sold a minimum of one million litres to each registered oil marketer that got the product from the plant since it commenced diesel sale.

Officials of the multi-billion dollar plant and oil dealers had confirmed that the product was dispensed to marketers at between N1,225/litre and N1,300/litre depending on the volume of purchase.

Reacting to the cost of the commodity during an interview with The Punch on Monday, the National Public Relations Officer, IPMAN, Chief Chinedu Ukadike, commended the refinery for the commencement in the release of refined products.

He, however, urged the managers of the plant to review the cost of the product downward, providing reasons why the price of Dangote diesel should be cheaper than what was imported.

Ukadike said, “During 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.

“These 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.

“The 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.”

The IPMAN PRO stated that forex should not be the benchmark for the price of Dangote refinery’s diesel.

“Also, 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.

“Other 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.

“When 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,” Ukadike stated.

He said oil marketers would also submit their price request to the Dangote refinery next week, adding that IPMAN would seek the intervention of the Federal Government on the matter.

“We are trying to seek a meeting with the refinery’s 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,” he said.

When asked to state when the association would meet with the refinery, Ukadike replied. “By next week we should get an appointment. That should be after the Sallah.”