In response to the continuous depreciation of the Nigerian naira against the US dollar, the Dangote Petroleum Refinery has raised the price of diesel from ₦940 per litre to ₦1,100 per litre.
This decision comes after a series of consultations with oil marketers and an initial price reduction from ₦1,200 per litre to ₦1,000 per litre on April 17.
The refinery’s pricing strategy has been adaptive to market dynamics, with price adjustments reflecting the impact of currency fluctuations.
Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), attributed this week’s price hike directly to the recent crash of the naira against the dollar.
According to Chief Ukadike Chinedu, National Public Relations Officer of IPMAN, the refinery faces intrinsic challenges due to currency depreciation, as it imports a significant portion of its crude oil priced in dollars, directly affecting the cost of refined products.
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Despite signs of naira improvement in April, the currency’s subsequent decline in May to over ₦1,400/$ has complicated pricing strategies for businesses reliant on imported goods.
In response, the Dangote refinery, led by Africa’s richest man, Aliko Dangote, is reportedly seeking to purchase millions of barrels of US crude to bolster its operations, reflecting strategic adjustments to operational demands and market conditions.
Additionally, the refinery announced plans to distribute Premium Motor Spirit (PMS) domestically, starting next month, potentially reducing Nigeria’s dependency on imported petrol. Oil marketers are hopeful that Dangote’s entry into the petrol market could lead to more competitive pricing, with expectations of petrol prices around ₦500 per litre, compared to current rates offered by NNPC.
Overall, the adjustments in diesel prices and the refinery’s entry into the petrol market signal significant shifts in Nigeria’s energy landscape, with potential implications for fuel costs and market competition.
(Punch)