Refined petroleum products from the $20bn Dangote Petroleum Refinery are to be sold in naira and not in the United States dollar as speculated in some quarters, oil marketers clarified on Monday.
Dealers in the downstream oil sector also stated that the
registration process for marketers at the refinery was still ongoing, as many
operators had continued to register with the plant.
It was further gathered that officials of the Nigerian
Midstream and Downstream Petroleum Regulatory Authority were meeting with the
management of the refinery to perfect the pricing template for products
produced by the facility.
On January 12, 2023, the Dangote Petroleum Refinery
announced the commencement of production of Automotive Gas Oil, also known as
diesel, and JetA1 or aviation fuel.
The President, Dangote Group, Aliko Dangote, had in a
statement issued by the firm, said, “We have started the production of diesel
and aviation fuel, and the products will be in the market within this month
once we receive regulatory approvals. This is a big day for Nigeria. We are
delighted to have reached this significant milestone.
“This is an important achievement for our country as it
demonstrates our ability to develop and deliver large capital projects. This is
a game changer for our country, and I am very fulfilled with the actualisation
of this project.”
Following that announcement, The PUNCH exclusively reported
on January 15, 2023, that seven major oil marketers in Nigeria had registered
with the refinery for the lifting and distribution of refined petroleum
products produced by the plant.
The seven major marketers include 11 Plc, Conoil Plc, Ardova
Plc, MRS Oil Nigeria Plc, OVH Energy Marketing Limited, Total Nigeria Plc and
NNPC Retail.
Also as a follow-up, The PUNCH reported again on Monday that
the refinery would supply fuel to about 150,000 retail outlets operated by the
Independent Petroleum Marketers Association of Nigeria following a meeting
between the management of the refinery and executives of IPMAN.
But some Nigerians have expressed concern over the supply of
crude to the plant in dollars, and whether this could make the managers of the
refinery to sell refined products in dollars, since the plant is located in the
free trade zone.
The Dangote Petroleum Refinery and Petrochemical Project, a
subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude
oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos,
Nigeria.
Responding to the an enquiry on whether the plant would
dispense its products in dollars, the National Public Relations Officer, IPMAN,
Chief Ukadike Chinedu, admitted that it was true that crude oil, being an
international commodity, was sold to the plant in dollars.
He, however, told our correspondent that this would not make
the plant to sell refined petroleum products to the Nigerian market in dollars,
stressing that other businesses operated in Nigeria by Africa’s richest man
were carrying out their transactions in naira.
“The legal tender in
Nigeria is the naira. The cement being sold by Dangote Cement is done in naira,
not in dollar. The spaghetti and other essential commodities that he is
involved in are all sold in naira.
“So why should one think that he will now sell fuel in
dollars? Except for the offshore sales for those who want to move the refined
products out of Nigeria using vessels to transport them to other countries.
Such customers may get theirs in dollar equivalent,” Ukadike stated.
He, however, noted that another important thing was for the
Nigerian government to be able to close up the widening gap in the foreign
exchange rate.
“If the exchange rate for the dollar is low, petroleum
products would have been cheap in Nigeria, because the products are imported.
So I believe that Dangote will definitely sell the products in our local
currency, which is naira,” he stated.
Asked if marketers had been briefed on whether products
would be sold in naira or dollars, considering the fact that crude was supplied
to the plant in dollars, Ukadike replied, “No, the pricing template has not
come out. What is going on now is legislation. The template is not yet out.
“And I must state that there is no way the NNPC will bring
out its template in naira and Dangote will bring out its own in dollars. It is
not possible! So for the cost of their products, I think they are still trying
to fix the prices with the regulatory agencies of the Federal Government.
“They will also look at the feasibility of the market and
other factors, before announcing their prices for diesel and aviation fuel,
which are the products they are producing now. So the price is not out, for
once it is out, you’ll be informed.”
Ukadike also stated that more oil marketers were registering
with the refinery, adding that IPMAN had been at the forefront of the
registration process.
“More applications for registration are being sent to the
refinery by marketers and I think the process has been ongoing for some time
now. It is a good thing for the country to have a refinery that refines its
crude domestically,” the IPMAN official stated.
Another major marketer confirmed that the pricing template
for refined products from the facility has not been released yet, but noted
that there had been a series of meetings with the regulators on this.
Asked whether the pricing template for refined products had
been released, the dealer, who pleaded not to be named due to lack of
authorisation, replied, “No, not yet. We have not received any template yet,
not to my knowledge.
“But it is possible that the template should be out soon
because various meetings by officials of the refinery with dealers and
regulators have been ongoing lately. The meetings are to give insights about
activities at the plant. And I believe the template is going to be in naira.”
The Dangote Petroleum Refinery is an industrial plant that
transforms crude oil into various usable petroleum products such as diesel,
gasoline, jet fuel and kerosene.
Dangote Petroleum Refinery with a capacity to refine 650,000
barrels of crude oil per day covers an area of approximately 2,635 hectares in
the Lekki Free Trade Zone in Lagos.
The refinery has so far received six million barrels of
crude oil at its two SPMs located 25km from the shore. The first crude delivery
was done on December 12, 2023, and the 6th cargo was delivered on January 8,
2024.
The refinery can load 2,900 trucks a day at its
truck-loading gantries. The products from the refinery will conform to Euro V
specifications, according to the firm.
“The refinery design complies with the World Bank, US EPA,
European emission norms, and Department of Petroleum Resources
emission/effluent norms, employing state-of-the-art technology,” the company
had stated in statement.