What petrol marketers told Tinubu about our low prices – Dangote

Dangote Industries Limited has announced plans to prioritize exporting petroleum products to international markets, including Europe, due to low local demand from Nigerian oil marketers.

This move follows complaints made by marketers to President Bola Tinubu, alleging that the Dangote Refinery’s competitive pricing is negatively affecting their businesses.

Devakumar Edwin, the Vice President of Dangote Industries, disclosed that despite the refinery’s production capacity, it has struggled to sell its products domestically. Only 29 diesel tankers are sold daily, pushing the company to export most of its diesel and aviation fuel.

The refinery, which has a processing capacity of 650,000 barrels per day, began exporting naphtha in March, followed by low-sulphur straight-run fuel oil (LSSR) in May. Sales of diesel and jet fuel started locally in April, with European diesel exports commencing in June.

During a Twitter Spaces discussion hosted by Nairametrics, Edwin explained that if local demand does not increase, Dangote Refinery may be forced to shift its focus entirely to exports. This would include petrol, which the refinery recently added to its product line.

“Petroleum product marketers in Nigeria have written to President Bola Tinubu to complain that the refinery’s local prices which have dropped from N1,200 to N1,000 and now N900 per litre are impacting their businesses negatively.

“As a result of this poor local patronage, the refinery exports most of its diesel and aviation fuel,” he said.

Given the current low domestic sales, Edwin revealed that the refinery has already been exporting aviation fuel and diesel to international markets.

He noted that unless Nigeria’s National Petroleum Company Limited (NNPCL) steps in to purchase their products, the trend of exporting refined fuel will continue.

“We have successfully started producing petrol, marking the last phase of our production lineup. However, the ongoing resistance from local traders and challenges in distributing products domestically might leave us with no other option but to export, as we’ve done with aviation fuel and diesel,” Edwin said.

He added that the company has encountered unexpected obstacles since starting operations, especially in securing adequate crude oil supply. The refinery, initially designed to add value to Nigeria’s economy by refining crude locally, now faces significant hurdles.

“We are struggling to obtain enough crude oil. Despite our efforts to rely on local crude, we’ve been forced to import it from countries like the U.S. and Brazil. This is a setback, as we are now importing crude while exporting refined products, which goes against the refinery’s original philosophy,” Edwin lamented.