The Dangote Petroleum Refinery has just hiked the price of diesel from ₦940 per litre to ₦1,100 per litre,as regards the continuous depreciation of the Nigerian naira against the US dollar.
The Dangote refinery earlier reduced the diesel prices to ₦940/litre. This decision was made after consultations with oil marketers and an initial price reduction from ₦1,200/litre to ₦1,000/litre on April 17.
This movement of price adjustments reflected the refinery’s responsive pricing strategy in relation to market dynamics.
Punch Newspaper, however, reports that this week’s price hike has been directly attributed to the adverse effects of the naira’s instability on currency markets.
“The increase in diesel price is a result of the recent crash of the naira against the dollar,” explained National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN) in the person of Abubakar Maigandi.
Further research provided by the National Public Relations Officer of IPMAN, Chief Ukadike Chinedu, revealed the refinery’s intrinsic challenges due to currency depreciation.
“The refinery imports a significant portion of its crude oil, which is priced in dollars; hence, the fluctuations in exchange rates directly impact the cost of refined products,” Ukadike said.
In April, the naira had shown signs of improvement, which influenced commodity prices positively .
Although , this improvement was not for a long period of time , as the naira collapsed to over ₦1,400/$ in May, further complicating pricing strategies for businesses reliant on imported goods.
According to a report, the Dangote refinery,has also been reportedly seeking to purchase millions of barrels of US crude to bolster its operations.
This move shows the refinery’s strategic adjustments in response to operational demands and market conditions.
In addition to the diesel price update, the refinery said its plans to commence the distribution of Premium Motor Spirit (PMS), commonly known as petrol, domestically starting next month.
This development is seen as a potential game-changer in reducing Nigeria’s dependency on imported petrol.
Oil marketers have reacted positively to the announcement, expressing hope that the refinery’s entry into the petrol market could lead to more competitive pricing.
“We anticipate that the price of petrol from Dangote will be lower than the current rates offered by NNPC, ideally around ₦500 per litre,” Maigandi remarked, stating the sector’s expectations for relief in fuel costs.
