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Dangote Refinery’s Diesel Supply Triggers Price Drop, Paving the Way for Cheaper Fuel

Dangote Refinery's Diesel Supply Triggers Price Drop, Paving the Way for Cheaper Fuel

The pump price of diesel has seen a significant drop across Nigeria, falling from approximately N1,700/litre to about N1,350/litre in some regions. This reduction follows the commencement of diesel sales by Dangote Petroleum Refinery.

Dangote’s $20 billion refinery began supplying diesel to the domestic market last week, selling a minimum of one million litres to registered oil marketers. The price ranged from N1,225/litre to N1,300/litre, depending on the purchase volume.

Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria, confirmed the refinery’s actions and expressed anticipation for the release of Premium Motor Spirit (PMS) in May.

Dr. Ralph Arokoyo, Chief Executive of AF Ralph Oil and Gas Ventures, corroborated the commencement of diesel sales by Dangote Refinery, highlighting the favorable pricing compared to other tank farms. He predicted further reductions in diesel prices as more products from the refinery enter the market.

Dangote Refinery, while confirming the diesel supply, hinted at the imminent release of petrol. An anonymous official noted that the availability of diesel has already led to price reductions in various parts of Lagos, signaling potential relief for consumers nationwide.

The Dangote refinery has faced a series of hurdles as it strives to release refined products into the market after it was officially inaugurated by former President Muhammadu Buhari in May last year.

Recall that on February 8, 2024, The PUNCH reported that indications emerged that lingering regulatory approvals stalled Dangote Petrochemical Refinery’s plan to release aviation fuel (Jet A1) and diesel for sale in the Nigerian market in January.

The report had stated that weeks after the January 31 timeline set by the management of Africa’s largest refinery to begin sale of its petroleum product in the local market, the refinery was still battling to cross the hurdles of the several layers of regulatory approvals.

It stated that the development came after the refinery began the production of refined petroleum products at the expansive facility.

On January 12, 2024, Dangote refinery announced that it had commenced the production of Automotive Gas Oil, popularly called diesel, and aviation fuel or JetA1.

Aliko Dangote, in a statement issued by his firm at the time, thanked President Bola Tinubu for his support, encouragement, and thoughtful advice towards the actualisation of the project.

Dangote also thanked the Nigerian National Petroleum Company Limited, Nigerian Upstream Petroleum Regulatory Commission, NMDPRA and Nigerians for their support and belief in the historic project, as he revealed that the facility would pump out diesel and aviation fuel in January, subject to regulatory approvals.

He said, “We thank President Bola Tinubu for his support and for making our dream come true. This production, as witnessed today, would not have been possible without his visionary leadership and prompt attention to details.

“His intervention at various stages cleared all impediments thereby accelerating the actualisation of the project. We also thank the NNPC, NUPRC and NMDPRA for their support. These organisations have been our dependable partners in this historic journey.

“We also thank Nigerians for their belief and support in this project. We have started the production of diesel and aviation fuel, and the products will be in the market within this month once we receive regulatory approvals.”

The refinery, Africa’s largest with a nameplate capacity of 650,000 barrels per day, was built on a peninsula on the outskirts of the commercial capital Lagos.

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