Afrigather 
Oil entrepreneurs are searching for a lower within the pump value of the Automotive Fuel Oil, popularly known as diesel, being produced by the Dangote Petroleum Refinery to between N700 and N850/litre, as operators plan to satisfy with the refinery managers within the coming week.
The biggest downstream advertising affiliation, the Unbiased Petroleum Entrepreneurs Affiliation of Nigeria, which made the decision in an interview with The PUNCH, stated the N1,225/litre diesel value from the indigenous refinery was excessive as a result of the commodity was produced in Nigeria and never imported.
The Petroleum Merchandise Retail Retailers House owners Affiliation of Nigeria additionally known as for a discount within the value of Dangote diesel.
The teams known as for the intervention of the Federal Authorities and urged the managers of the refinery to contemplate the excessive price of logistics required to move the product from Lagos the place the refinery is situated.
The oil entrepreneurs identified that the product is being landed in Nigeria by some importers at N1,250/litre following the appreciation of the naira towards the greenback, including that this must be another excuse why the Dangote refinery that produces diesel in Nigeria ought to lower down its value.
Based on the oil entrepreneurs, diesel produced on the Dangote refinery has no vessel price, import prices, and different prices related to the prices related to the importation of the commodity into Nigeria.
This got here because it was gathered that the entrepreneurs underneath the aegis of IPMAN and Unbiased Petroleum Entrepreneurs Affiliation of Nigeria, and PETROAN held separate conferences on Monday to deliberate on the pricing of petroleum merchandise from the refinery, in addition to different points.
A PUNCH report from April 3, 2024 states that the $20bn refinery began pumping out diesel to the home market the earlier Wednesday (March 27, 2024). The refinery bought a minimal of 1 million litres to every registered oil marketer that obtained the product from the plant because it commenced diesel sale.
Officers of the multi-billion greenback plant and oil sellers had confirmed that the product was distributed to entrepreneurs at between N1,225/litre and N1,300/litre relying on the amount of buy.
Reacting to the price of the commodity throughout an interview with our correspondent on Monday, the Nationwide Public Relations Officer, IPMAN, Chief Chinedu Ukadike, counseled the refinery for the graduation within the launch of refined merchandise. Nevertheless, he urged the managers of the plant to evaluate the price of the product downward, offering the reason why the worth of Dangote diesel must be cheaper than what was imported.
“Throughout the building of the Dangote refinery, we supported and welcomed it. Additionally, it was our prayers that an indigenous refinery be opened so that it’ll restrict the bills of logistics by way of importation, clearing, and different actions related to bringing merchandise into the nation.
“These are among the hurdles that necessitated the excessive price of AGO or diesel being imported into Nigeria. So now {that a} non-public refinery with a really excessive capability has began producing petroleum merchandise right here in Nigeria, we’d have appreciated that its merchandise being bought to Nigerians will likely be cheaper than the touchdown price of imported merchandise.
“The greenback is at the moment about N1,270 to N1,290 and it’s coming down. So if the greenback is a determinant issue by way of the importation of petroleum merchandise and diesel is bought by these firms that imported at N1,300/$, I imagine that Dangote refinery shouldn’t measure the worth of its diesel with the parameter of the foreign exchange.”
The IPMAN PRO said that foreign exchange shouldn’t be the benchmark for the worth of Dangote refinery’s diesel, “Additionally, another bills on the price of diesel produced by the refinery have been waived. So these bills ought to mirror on the worth of the product. The refinery is in Lagos, so there isn’t a vessel voyage price and this must be deducted from the worth Dangote is giving us.
“Different entrepreneurs who imported their merchandise are touchdown it at between N1,200 and N1,250/litre for the reason that drop in foreign exchange. So Dangote must be giving us his product at round N700 to N850/litre since he’s producing it right here.
“After we purchase at that value, it should additional strengthen the naira, minimise profiteering and cut back the price of items and providers which might be transported utilizing diesel. In the event you minus the associated fee spent on vessels, importation prices, and the price of international change to some extent, the worth of diesel will drop,” Ukadike said.
He stated oil entrepreneurs would additionally submit their value request to the Dangote refinery subsequent week, including that IPMAN would search the intervention of the Federal Authorities on the matter.
“We are attempting to hunt a gathering with the refinery’s industrial division. I simply got here out of a gathering to talk with you, the place we’re discussing how to have the ability to persuade them to evaluate their costs and in addition ask the federal government to intervene.”
When requested to state when the affiliation would meet with the refinery, Ukadike replied that, “By subsequent week we should always get an appointment. That must be after the Sallah.”
Some IPMAN members had additionally began buying the product from the refinery on the N1,225/litre value, although the affiliation had said that it will search its value from the managers of the refinery.
“They began pumping out diesel to entrepreneurs final week. Additionally they promised to promote aviation gasoline quickly. A few of my members confirmed this to me after making the acquisition,” the Nationwide President, the Unbiased Petroleum Entrepreneurs Affiliation of Nigeria, Abubakar Maigandi, had advised our correspondent final week.
“So a few of our entrepreneurs have began getting the product, however as an affiliation, now we have not obtained the product but, as a result of we need to get the precise price that it is going to be bought to us once we purchase in bulk. Nevertheless, they’ve began promoting diesel as a result of a few of our entrepreneurs have began shopping for.
“They’re promoting at N1,225/litre and the minimal quantity they’re giving is a million litres per marketer. Additionally, they assured us that they may launch extra merchandise, however for now this (diesel) is what they’re beginning with. So we expect them to launch PMS anytime from now.”
Maigandi had stated the transfer by Dangote would positively result in a crash in diesel value, because the commodity rose to a excessive of about N1,700/litre lately, “The value of diesel goes to fall due to the discharge of merchandise from Dangote refinery. It’s already coming down in Lagos.”
One other oil marketer, who’s the Chief Govt, AF Ralph Oil and Fuel Ventures, Dr Ralph Arokoyo, had additionally confirmed that the refinery began the sale of diesel to sellers, including that the plant began allotting the product about two weeks in the past.
When requested if the Dangote refinery had began supplying diesel to the market, Arokoyo replied, “Sure they’ve began. They began diesel gross sales final Wednesday and so they have bought to many entrepreneurs together with members of IPMAN and MEMAN (Main Vitality Entrepreneurs Affiliation of Nigeria), in addition to different non-public registered impartial sellers.”
The President, the Petroleum Merchandise Retail Retailers House owners Affiliation of Nigeria, Billis Gillis-Harry, additionally said on Monday that the price of diesel from the Dangote refinery must be diminished.
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“PETROAN has an settlement with Dangote to produce to us at N1,200, however we’ll nonetheless request a downward evaluate. We’ve over 19,000 members and over 6,800 individuals are lively and able to do enterprise. So we have to speak about so many points.
“Initially, the logistics from Lagos to Port Harcourt, Calabar, Warri, Zamfara, and different areas will not be very straightforward. So these in Lagos can take the N1,200/litre value as a result of their price of logistics is low, however this isn’t so for sellers exterior Lagos. So we will definitely nonetheless interact with them on how costs will come down. Nevertheless, the excellent news is that they’ve rolled out merchandise and we salute and congratulate them, particularly the Govt Director, Business, Mr Rabiu Umar, for his braveness in ensuring Nigeria is moist with refined merchandise.”
Gillis-Harry, nevertheless, said that the refinery must recoup the funds utilized in developing it, as a number of billions of {dollars} had been borrowed to develop the plant, “The refinery has collected billions of {dollars} as loans to place itself up. It should begin to work to pay again these loans. And the one option to get again this cash is by producing and promoting, in addition to exporting. Now he has began with home gross sales. So organisations like ours must sit down with them and work out the main points and this may allow us to know precisely what their price parts are. We need to promote and so they need to produce.”
The PETROAN president stated his affiliation wouldn’t need to communicate on the proposed price of petrol that ought to come from the Dangote refinery till the plant begins producing the commodity for the home market.
“You may’t even speak about value after they’ve not began producing. Sure, they’ve mentioned with PETROAN that they’d produce PMS, however they haven’t began producing,” he stated.
When advised that the refinery was working to launch PMS in Could, Gillis-Harry stated, “They’ve not began producing. So we received’t work on projections. Allow them to produce first and we’ll then know what their enter, output, and pricing are. That’s the solely time we will speak about what costs they need to promote. Dangote refinery has knowledgeable PETROAN that they may produce PMS however we await their manufacturing, after which we’ll know the inputs of their manufacturing earlier than we speak in regards to the pricing. We are able to’t inform them what to promote now.”
Dangote officers determined to remain mute regardless of a number of makes an attempt to get their enter on the matter. Nevertheless, a senior official from the multibillion-dollar refinery confirmed final week that the plant had began the sale of diesel to entrepreneurs, because the supply famous that Premium Motor Spirit, popularly known as petrol, would quickly be launched to the market.
“The product (diesel) is in every single place and so they (entrepreneurs) are accessing it with ease. The product has been on sale to entrepreneurs since final week and the transactions have been higher. The value of the product in numerous areas of the nation will come down, and it’s already coming down in lots of components of Lagos since we began releasing merchandise to entrepreneurs,” the official, who spoke on situation of anonymity as a consequence of lack of authorisation to talk on the matter, had said.
The Dangote refinery has confronted a collection of hurdles because it strives to launch refined merchandise into the market after it was formally inaugurated by former President Muhammadu Buhari in Could final yr.
On February 8, 2024, The PUNCH reported that indications emerged that lingering regulatory approvals stalled Dangote Petrochemical Refinery’s plan to launch aviation gasoline (Jet A1) and diesel on the market within the Nigerian market in January.
The report said that weeks after the January 31 timeline set by the administration of Africa’s largest refinery to start the sale of its petroleum product within the native market, the refinery was nonetheless battling to cross the hurdles of the a number of layers of regulatory approvals, stating that the event got here after the refinery started the manufacturing of refined petroleum merchandise on the expansive facility.
On January 12, 2024, Dangote refinery introduced that it had commenced the manufacturing of Automotive Fuel Oil, popularly known as diesel, and aviation gasoline or JetA1.
Aliko Dangote, in a press release issued by his agency on the time, thanked President Bola Tinubu for his help, encouragement, and considerate recommendation in direction of the actualisation of the venture. He additionally thanked the Nigerian Nationwide Petroleum Firm Restricted, Nigerian Upstream Petroleum Regulatory Fee, NMDPRA, and Nigerians for his or her help and perception within the historic venture, as he revealed that the power would pump out diesel and aviation gasoline in January, topic to regulatory approvals.
“We thank President Bola Tinubu for his help and for making our dream come true. This manufacturing, as witnessed at the moment, wouldn’t have been attainable with out his visionary management and immediate consideration to element. His intervention at numerous levels cleared all impediments thereby accelerating the actualisation of the venture. We additionally thank the NNPC, NUPRC, and NMDPRA for his or her help. These organisations have been our reliable companions on this historic journey. We additionally thank Nigerians for his or her perception and help on this venture. We’ve began the manufacturing of diesel and aviation gasoline, and the merchandise will likely be available in the market inside this month as soon as we obtain regulatory approvals.”
The refinery, Africa’s largest with a nameplate capability of 650,000 barrels per day, was constructed on a peninsula on the outskirts of the industrial capital Lagos.
For years, Nigeria has relied on costly imports for practically all of the gasoline it consumes however the $20bn refinery is ready to show it right into a internet exporter of gasoline to different West African international locations, in an enormous potential shift of energy and revenue dynamics within the trade.
The graduation of diesel sale in Nigeria by the plant will not be its first refined merchandise sale, as The PUNCH reported in February that the refinery issued tenders to promote two gasoline cargoes for export.
This was the primary from the brand new refinery, because the report said that this was confirmed by buying and selling sources with data of the matter who spoke to Reuters on the time.
Nigeria has for years relied on costly imports for practically all of the gasoline it consumes however the $20bn refinery is ready to show it right into a internet exporter of gasoline to different West African international locations, in an enormous potential shift of energy and revenue dynamics within the trade
Reuters had said in its report that Dangote declined its request for remark. The oil agency additionally remained mute to a number of inquiries by The PUNCH on the time.
The report said that the primary cargo was 65,000 metric tonnes of low-sulphur straight-run gasoline oil, which Dangote awarded to Trafigura, which was as a consequence of load on the finish of February, three of the sources stated as Trafigura declined to remark on the time.
At the least one refiner stated that they had been supplied the cargo by Trafigura with out elaborating additional.
The second tender was for about 60,000 tonnes of naphtha, three different sources had said. Two of them added that the tender closed on February 15. Loading particulars weren’t instantly accessible on the time.
Sources additionally stated that the refinery was making ready to ship its first gasoline cargoes to the home market inside weeks. The 2 fuels on provide had been typical merchandise of operating gentle candy crude by way of a crude distillation unit in a refinery with out additional upgrading capability.
In December 2023, Dangote started shopping for crude oil and the Nigerian Nationwide Petroleum Firm Restricted has been the principle provider. The refinery additionally bought some US oil and reportedly obtained two million barrels of US WTI Midland in early March.
SOURCE: PUNCH
