By: Amadi Vincent Uzoma
Dangote Petroleum Refinery has raised the price of diesel from ₦940 per liter to ₦1,100 per liter due to the continuous devaluation of the Nigerian naira against the US dollar. The initial reduction in diesel prices to ₦940 per liter was announced after discussions with oil marketers, following an earlier price decrease from ₦1,200 to ₦1,000 per liter on April 17.
These adjustments in pricing reflect the refinery’s adaptable pricing approach in response to market changes. The recent increase in diesel prices has been linked directly to the negative impact of the naira’s instability against the dollar in currency markets.
Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that the surge in diesel prices is a consequence of the recent depreciation of the naira against the dollar. According to Chief Ukadike Chinedu, the National Public Relations Officer of IPMAN, the refinery faces challenges due to currency fluctuations as a significant portion of its crude oil is imported and priced in dollars.
While the naira briefly strengthened in April leading to favorable commodity prices, the currency’s value dropped to over ₦1,400/$ in May, complicating pricing strategies for businesses relying on imports. The Dangote refinery, founded by Aliko Dangote, Africa’s richest individual, is reported to be acquiring millions of barrels of US crude to support its operations, indicating strategic adjustments in response to operational necessities and market conditions.
Aside from the diesel price increase, the refinery intends to launch the distribution of Premium Motor Spirit (PMS) or petrol within the country in the coming month. This move is expected to reduce Nigeria’s reliance on imported petrol. Oil marketers have shown optimism about the announcement, hoping that the refinery’s entry into the petrol market will bring about more competitive pricing. Maigandi expressed expectations that Dangote’s petrol price might be lower than the current rates offered by NNPC, ideally around ₦500 per liter, providing hope for cost relief in the fuel sector.
