Naira Depreciation Drives Dangote Diesel to N1,100 per Litre

Diesel prices at the Dangote refinery have increased from N940 to N1,100 per litre due to the naira’s recent weakness against the US dollar, according to sources on Tuesday.

This follows the refinery’s announcement that diesel and aviation fuel prices would be reduced to N940 and N980 per liter on April 24, 2024.

This cut follows a previous drop from N1,200 to N1,000 per liter in response to oil marketers’ requests.

In a second adjustment, the refinery provided additional price savings to bulk buyers purchasing five million liters or more.

However, on Tuesday, it was verified that the price of diesel had increased to N1,100 per litre. Dealers buying lesser volumes reportedly pay up to N1,200 per litre.

Oil marketers link the price increase on the naira’s depreciation against the dollar. Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the rise, saying,

“The refinery had reduced the price to N940 per litre, but it recently went up to N1,100 per litre due to the rising exchange rate.”

Although Dangote refinery authorities declined to comment on the matter, industry insiders and major marketers confirmed the price increase.

Chief Ukadike Chinedu, IPMAN’s National Public Relations Officer, said that the naira’s devaluation has a direct influence on the cost of imported crude oil, which is priced in dollars.

“The recent rise in the foreign exchange rate is going to have an impact on the prices of refined products from the plant,” Chinedu said.

Earlier this year, the naira showed symptoms of strengthening versus the dollar, which boosted commodity prices.

On April 16, 2024, the naira rose to N1,136 per dollar in the official market and N1,050 per dollar in the parallel market.

However, the recent depreciation has negated these benefits, resulting in higher diesel costs at the Dangote refinery.

The multibillion-dollar plant at Epe, Lagos, valued at $22 billion, now confronts the problem of responding to fluctuating exchange rates, with huge repercussions for Nigeria’s diesel pricing and supply.

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