Dangote Refinery to sell products to local marketers in Naira

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.”

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.

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 sell refined products in dollars, since the plant is located in the free trade zone.

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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 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 dollars. The spaghetti and other essential commodities that he is involved in are all sold in naira.

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“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.

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.