Punch reports that Devakumar V.G. Edwin, vice president of Dangote Industries Limited, has voiced his extreme dissatisfaction over local petroleum marketers’ continuous boycott of Dangote Refinery’s products. Even though the refinery has a sizable production capacity, Edwin disclosed that only 3% of its output is bought by Nigerian traders; the remainder is exported.CONTINUE FULL READING>>>>>
Speaking during an X Space discussion hosted by Nairametrics on Wednesday, Edwin highlighted that the Dangote Refinery was established with the primary goal of utilizing Nigeria’s local crude oil resources.
The aim was to refine petroleum locally, thus reducing the country’s dependence on importing finished products.
However, this goal has been obstructed by local traders’ reluctance to buy from the refinery.
“The whole purpose of doing this refinery in Nigeria was to utilize our local crude instead of exporting raw materials and importing finished products,” Edwin stated.
He emphasized that the refinery was built with the intention to meet Nigeria’s fuel needs and to produce surplus for export.
Unfortunately, local traders seem unwilling to support this vision.
Edwin disclosed that the refinery is currently forced to export 97% of its production, which includes essential products like diesel and jet fuel, as local marketers are deliberately choosing to source refined petroleum from abroad, rather than purchasing from Dangote Refinery.
“I’m selling 2 to 3% to small traders who are willing to buy, while the rest 95 to 97% I’m forced to export,” he said, lamenting the minimal interest shown by local marketers.
According to Edwin, this refusal to support local production appears to be a deliberate attempt by marketers to undermine the refinery’s operations.
He suggested that the marketers are possibly threatened by the refinery’s pricing strategies, which are designed to offer more affordable petroleum products.
Edwin disclosed that the marketers have gone as far as writing a letter to President Bola Tinubu to express concerns over Dangote Refinery’s pricing, accusing the company of “disturbing the market by dropping our prices.”
This boycott has forced the refinery to look beyond Nigeria for buyers. Since local distribution has been blocked, most of the refinery’s output is being shipped overseas.
Edwin pointed out that despite this, Dangote Refinery is capable of producing up to 54 million liters of refined petroleum products per day, should there be a steady supply of crude oil.
However, inconsistent access to local crude has become a significant challenge.
Edwin highlighted that the refinery has had to rely on imported crude oil from countries like the United States and Brazil to maintain operations.
This dependency has been necessitated by international oil companies (IOCs), who prioritize selling crude oil to foreign markets where they can fetch higher prices, leaving local buyers struggling to secure affordable supplies.
Despite these hurdles, Edwin reaffirmed the refinery’s potential to meet Nigeria’s domestic fuel needs.
He stressed that with just 44% of the refinery’s production, the country’s entire demand for refined products could be met.
“We should be able to refine and use the finished products within Nigeria and produce more to export the surplus,” he explained, underlining the refinery’s capability to not only satisfy local demand but also become a major player in the global petroleum market.
The Dangote Refinery, which began operations in March, initially supplied diesel and aviation jet fuel in April.
The refinery is now set to begin supplying premium motor spirit (PMS) this month, marking a crucial milestone in its operations.
Despite its potential to transform Nigeria’s petroleum industry, the refinery’s struggles with local traders continue to hamper its original mission.CONTINUE FULL READING>>>>>
