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Nigerian business mogul Aliko Dangote, Chairman of Dangote Industries Limited, announced in June that the highly anticipated Dangote refinery is set to start fuel production in mid-July.
As the countdown begins for the Dangote refinery’s entry into the local market, oil marketers are voicing concerns that the price of petrol from the $20 billion facility may not be as competitive as initially expected. With just two weeks to go, industry players are bracing for a potentially higher price point.
Dangote attributed the revised timeline to unforeseen challenges that slowed down the refinery’s operational preparations.
The fears of oil marketers can be traced back to the Dangote refinery’s precarious crude oil supply situation.
Despite its impressive 650,000-barrel-per-day capacity, the facility is reportedly struggling to secure a reliable supply of feedstock from international oil companies, which Dangote has publicly accused of trying to thwart his ambitions.
To maintain operations, Dangote has been forced to import crude oil from international sources, including the US, at a significant cost. Unfortunately, this has led to a pricing conundrum, making it difficult for local marketers to sell diesel and aviation fuel at a profit.
According to a marketing professional, the costly imports of crude oil may set off a chain reaction, driving up production expenses and ultimately leading to higher prices at the pump, a prospect that has sparked concern among industry players.
Read also: Dangote Refinery Says IOCs Engaging In Sabotage Efforts
Marketers have hoped that the refinery will reduce the price of petrol, which increased from N200 per litre to over N600 after President Bola Tinubu removed the subsidy from the product.
There are fears that Dangote’s inability to access local crude may crush the hopes of Nigerians and marketers for cheaper petrol.
Hammed Fashola, IPMAN’s second-in-command, revealed the association’s fears about the potential consequences of increased crude imports on the price of petrol from the Dangote refinery, which could have far-reaching implications for the industry.
According to sources, the reluctance of International Oil Companies (IOCs) to supply crude to Dangote Refinery could create a monumental hurdle for the facility, hindering its ability to address Nigeria’s fuel woes.
To tackle this, IPMAN is urging the government to intervene and ensure a steady supply of crude to the refinery, alleviating the struggles of Nigerians in accessing affordable fuel.
The IPMAN official urged Dangote Refinery to resist the temptation of monopolizing the petroleum market if it receives government assistance, emphasizing the need for competitive pricing that benefits the masses.
Meanwhile, NNPC has come under fire for allegedly strong-arming customers into purchasing lubricants.
NNPC has clarified that purchasing lubricants or engines is not a prerequisite for buying fuel at its stations, putting to rest rumors of coercive sales tactics. Nigerians can now fill up their tanks without being forced to make additional purchases.
In a bid to address customer concerns, NNPC’s Olufemi Soneye stated on Sunday, June 30, 2024, that the company’s attendants were never instructed to tie fuel sales to the purchase of lubricants or engine oil. This reassurance aims to strengthen trust between NNPC and its customers.
