The price of diesel from Dangote refinery has surged from N940 to N1,100 per litre due to the naira’s recent depreciation against the United States dollar, sources revealed on Tuesday.
This comes after the refinery announced a reduction in diesel and aviation fuel prices to N940 and N980 per litre, respectively, on April 24, 2024.
This reduction followed a previous drop from N1,200 to N1,000 per litre in response to appeals from oil marketers, as reported by Business Elites Africa.
In a subsequent adjustment, the refinery offered further price cuts for bulk buyers purchasing five million litres or more.
However, on Tuesday, it was confirmed that the price of diesel has now climbed to N1,100 per litre. Dealers purchasing smaller volumes are reportedly paying up to N1,200 per litre.
Oil marketers attribute the price hike to the weakening of the naira against the dollar. Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the increase, stating,
“The refinery had reduced the price to N940 per litre, but it recently went up to N1,100 per litre due to the rising exchange rate.”
Although Dangote refinery officials did not comment on the situation, industry insiders and major marketers corroborated the price increase.
Chief Ukadike Chinedu, National Public Relations Officer of IPMAN, explained that the devaluation of the naira directly impacts the cost of imported crude oil, which is priced in dollars.
“The recent rise in the foreign exchange rate is going to have an impact on the prices of refined products from the plant,” Chinedu noted
Future Implications for the Dangote Refinery
Earlier this year, the naira had shown signs of strengthening against the dollar, positively influencing commodity prices.
On April 16, 2024, the naira appreciated to N1,136/$ in the official market and N1,050/$ in the parallel market.
However, the current depreciation has reversed these gains, leading to increased diesel prices from the Dangote refinery.
The multi-billion-dollar facility in Epe, Lagos, valued at $22 billion, now faces the challenge of adjusting to the fluctuating exchange rates, with significant implications for diesel pricing and supply in Nigeria.
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