Since kicking off diesel production in January 2024, the refinery has cut diesel prices more than three times, dropping from an initial N1,700 per litre to the current price, offering much-needed relief to both manufacturers and consumers.
The latest N55 per litre reduction comes after Ken Ife, a development economist and public policy analyst, revealed that Dangote Petroleum Refinery took a hit of over N10 billion to maintain a consistent petrol price nationwide during the holiday season.
Ife also commended the refinery for setting a new standard in Nigeria’s energy sector, creating significant opportunities for export revenue.
Discussing the refinery's transformative effects on Arise TV, Ife noted that for years, the equalisation fund has been managing price differences and transportation costs for petroleum distribution across the country. However, reports indicate that the fund owes marketers over N80 billion, according to the development analyst.
“What has actually happened is that the president has shifted the subsidy burden away from the public purse and onto the private sector. The equalisation fund, which was meant to cover the price differential and transportation costs, plays a crucial role. If petroleum is to be sold across the country at a set price, then transportation costs must be accounted for to ensure this is possible. That’s the purpose of equalisation. However, the equalisation fund is reported to owe around N80 billion to the marketers, and this issue is still under discussion.
“During the Christmas season, which is traditionally the most challenging period, we often face shortages of petroleum, petrol hoarding, and arbitrary price hikes, all of which impact the cost of food. In response, during this last yuletide, the Dangote Group made the decision to absorb the costs. They equalised the price themselves, at a cost of over N10 billion. In doing so, they effectively absorbed the subsidy,” he said.
Ife also mentioned that the facility is guiding Nigeria to shift from its conventional emphasis on Premium Motor Spirit (PMS) to a broader spectrum of petroleum-based exports.
He further noted that with significant international companies like BP and Saudi Aramco acquiring refined products from Nigeria, the nation is rapidly establishing itself as a vital participant in the global petroleum market. The analyst conveyed optimism that Nigeria is progressing towards self-sufficiency in petroleum products while also establishing itself as a dominant energy exporter.