Over Naira crisis, Dangote increases diesel price

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.

National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, 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.

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.

In another significant development, the refinery has announced plans to start distributing Premium Motor Spirit (PMS) locally starting next month, which could substantially reduce Nigeria’s dependence on imported petrol, with predictions of petrol prices dropping to around ₦500 per litre.

Nigeria’s energy landscape is undergoing a significant transformation, driven by adjustments in diesel prices and the refinery’s expansion into the petrol market, which may lead to changes in fuel costs and market competition, and potentially reshape the industry’s landscape.