In a bid to alleviate the financial burden on businesses and consumers, the Dangote Petroleum Refinery announced a significant reduction in the price of diesel from N1,200 to N1,000 per liter.
This move follows the refinery’s previous reduction from the market rate of N1,600, representing over a 30% crash. The latest price adjustment is expected to have a considerable impact on the overall economy, particularly in light of diesel’s crucial role in powering businesses across various sectors.
“While rolling out the products, the refinery supplied at a substantially reduced price of N1,200 per liter three weeks ago, representing over 30 percent reduction from the previous market price of about N1,600 per liter.
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“This significant reduction in the price of diesel, at Dangote Petroleum Refinery, is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country,” the company said in the note.
The reduction in diesel prices comes as a welcome relief amidst concerns over the high cost of living, exacerbated by the country’s high food inflation rate, which stood at 40.01% as of March. The steep reduction in diesel prices is expected to positively affect all spheres of the economy, ultimately contributing to a reduction in the nation’s high inflation rate.
Dangote Petroleum Refinery, Africa’s largest refinery project spearheaded by Aliko Dangote with an investment of about $19 billion, has begun supplying the Nigerian domestic market with petroleum products, including diesel and aviation jet fuel. The refinery’s strategic positioning near Lagos’ commercial center and its capacity to process up to 650,000 barrels per day are poised to revolutionize Nigeria’s petroleum industry, significantly reducing the nation’s dependence on imported fuels.
Devakumar Edwin, a Group Executive at Dangote, confirmed that the company has initiated the distribution of diesel and jet fuel to the local market.
“We have substantial quantities. Products are being evacuated both by sea and road. Ships are lining up one after another to load diesel and aviation jet fuel.
“Ships load a minimum of 26 million liters, though we try to push for 37 million liters vessels, for ease of operations,” Edwin said.
However, despite the refinery’s efforts to lower diesel prices, industry stakeholders, including the Independent Petroleum Marketers Association of Nigeria (IPMAN), advocate for further reductions to between N700 and N850 per liter. Marketers argue that such reductions would not only enhance competitiveness within the sector but also stimulate economic activity by reducing operational costs for businesses across industries.
Oil marketers and refinery managers have called upon the Federal Government to intervene and facilitate constructive dialogue aimed at reaching a consensus on fair and sustainable pricing mechanisms for diesel. They believe that by aligning diesel prices with market realities and addressing concerns raised by industry stakeholders, policymakers can effectively support economic recovery efforts and foster long-term prosperity for Nigeria’s economy.
This intervention is seen as crucial for promoting stability in the energy sector and enhancing investor confidence in Nigeria’s economic future.
In essence, the reduction in diesel prices holds the promise of catalyzing a virtuous cycle of economic growth, wherein lower operational costs translate into reduced consumer prices, thereby mitigating inflationary pressures and enhancing overall economic stability.