The Dangote Petroleum Refinery says only 3 percent of local
oil marketers are purchasing refined petroleum products.
Devakumar Edwin, vice-president of Dangote Industries
Limited (DIL), spoke during an X space organised by Nairametrics.
He said due to the low patronage, the refinery is forced to
export 97 percent of its refined products.
“The conglomerate of all the importers are refusing to buy
from us. It is very strange that after putting up the refinery to supply the
products locally, I have to export every diesel and jet fuel because they do
not want to buy from us,” Edwin said.
“We started selling
the diesel, we fixed the price, and it was lower than the prevailing market
price. Then, we brought the price further down and they (marketers) wrote to
the president complaining.”
‘WHY OIL MARKETERS WROTE TO TINUBU’
Edwin said the marketers complained that the refinery
reduced the price of diesel and so “they said they do not want to buy from us”.
Specifically, he said the Depot and Petroleum Products
Marketers Association of Nigeria (DAPPMAN) wrote to President Bola Tinubu that
the price cut affected their business “due to the large inventory of imported
AGO”.
“I’m selling 2 percent to 3 percent to small traders who are
willing to buy, while the rest 95 to 97% I’m forced to export,” he said.
The vice-president said the refinery may also be forced to
export its petrol “if they are not willing to buy”.
“But to be very frank and straightforward, the Nigerian
National Petroleum Company (NNPC) has come forward,” Edwin said.
“They have been
discussing. Athough the discussion has been going on for almost three weeks and
it is not yet concluded, they are working to agree with us on the quantity of
crude they can sell and they said they will monitor the products.
“They are going to have a team of 10 people sitting in the
refinery. They will see the crude which we are going to receive, ensuring that
everything is coming into the refinery, and they would watch whether we are
producing and processing everything and then, they would watch whether we are
giving back all the products.”
Dangote refinery commenced petrol production on September 3.
On the same day, the Nigerian Midstream and Downstream
Petroleum Regulatory Authority (NMDPRA) said the Dangote refinery is expected
to supply 25 million litres of petrol daily in September and will subsequently
increase this amount to 30 million litres daily from October.
On September 7, the NNPC denied reports that it intends to
become Dangote refinery’s sole distributor following speculations that the
national oil firm had planned to do so.
The company also said there is no guarantee that domestic
refining would lead to lower prices compared to global parity pricing.
NNPC said Dangote refinery and any other domestic refinery
are free to sell directly to any marketer on a willing buyer, willing seller
basis, which is the current practice for all fully deregulated products.
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