Why Dangote Refinery’s Fuel Supply Won’t Lower Prices – Marketers and Experts

Ahead of the commencement of Premium Motor Spirit (PMS) supply by Dangote Refinery in Nigeria, industry experts and marketers have dismissed expectations of a significant price drop.

The Chairman of Dangote Refinery, Aliko Dangote, recently delayed the start date for fuel supply to mid-July 2024 from the previously projected June, attributing the delay to unforeseen issues.

While the refinery began supplying diesel and aviation fuel in April, securing crude oil for petrol production has been challenging. Dangote has alleged that cartels within the oil and gas sector are sabotaging efforts to kickstart full-scale operations. He claims that international oil companies (IOCs) in Nigeria are selling crude oil to the refinery at a premium price, forcing Dangote to look overseas for crude supplies.

The Lagos State Chamber of Commerce and Industry has cited oil theft and pipeline vandalism as reasons for inadequate crude supply. The Nigerian Upstream Petroleum Regulatory Commission has pledged to ensure IOCs supply crude oil to the refinery, but issues persist, leaving the fuel supply start date uncertain.

Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association (PETROAN), expressed skepticism about the refinery’s impact on fuel prices. He noted that previous expectations of price reductions for diesel and aviation fuel were unmet, and similar outcomes are anticipated for petrol if crude oil has to be imported. To

The high cost of energy continues to stifle Nigeria’s economy. Experts like Barr. Ameh Madaki and Professor Wumi Iledare argue for better management and policy consistency in the oil and gas sector to address these challenges. Madaki suggests that Dangote Refinery should leverage its position to reduce fuel prices, while Iledare emphasizes the need for transformational policies over transactional decisions.