Dangote Refinery has announced an increase in the price of Automotive Gas Oil (diesel) from N940 per litre to N1,100 per litre.
This significant adjustment in pricing reflects the refinery’s efforts to mitigate the impact of currency depreciation on its operations.
The decision to raise the price of diesel comes amidst ongoing challenges in the foreign exchange market, with the naira experiencing a downward spiral against the dollar in recent weeks.
The refinery cited the unfavorable exchange rate as the primary driver behind the price hike, signaling the intricacies of operating in a volatile economic environment.
It is worth noting that just a few weeks ago, on April 24, 2024, Dangote Refinery had announced a reduction in the prices of diesel and aviation fuel to N940 per litre and N980 per litre, respectively.
This move was aimed at responding to calls from oil marketers for a reduction in diesel prices, demonstrating the refinery’s willingness to adapt to market dynamics.
However, the recent depreciation of the naira has necessitated a reversal of this downward trend, prompting Dangote Refinery to adjust its pricing strategy accordingly.
Some dealers reported purchasing diesel from the plant at even higher rates, reaching up to N1,200 per litre for those procuring lesser volumes.
Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria, attributed the price increase to the rising exchange rate, as communicated by the refinery.
He emphasized the direct correlation between currency fluctuations and the cost of imported commodities, such as crude oil, which forms the basis for diesel production.
While officials of the refinery have remained tight-lipped on the matter, industry sources and major marketers have corroborated reports of the price adjustment.
Chief Ukadike Chinedu, the National Public Relations Officer of IPMAN, echoed similar sentiments, highlighting the adverse impact of the naira’s depreciation on refined product prices.
The recent fluctuations in the naira-dollar exchange rate underscore the challenges facing Nigeria’s economy, with implications for various sectors, including energy and transportation.
Despite initial signs of stability earlier in the year, the naira’s recent depreciation has reignited concerns about inflationary pressures and economic uncertainty.