During an X (formerly Twitter) space hosted on Wednesday, he revealed that despite the refinery’s efforts to supply affordable petroleum products, many traders in Nigeria have refused to purchase from the refinery, preferring to continue importing refined products from abroad.
Speaking during the session, Edwin highlighted the initial vision behind the establishment of the Dangote Refinery, which was aimed at reducing Nigeria’s reliance on imported petroleum products.
“The whole purpose of doing this refinery in Nigeria was to utilize our local crude instead of exporting raw materials and importing finished products,” he explained. “We should be able to refine and use the finished products within Nigeria and produce more to export the surplus.”
Despite the refinery’s large production capacity, local marketers are only purchasing about 3% of the output.
He noted that the remaining 97% of the refinery’s production, including diesel and jet fuel, is being exported due to a boycott by local traders who refuse to buy at the refinery’s lower prices.
This has forced the refinery to explore international markets, exporting the majority of its refined products, even though it was originally intended to supply the Nigerian market.
Edwin said: “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,” while speaking about the quantity of the refinery’s Products sold locally.
He suggested that there is a deliberate attempt by some marketers to block the refinery’s operations, as they prefer to import products rather than support local refining.
He further revealed that local marketers wrote to President Bola Tinubu, complaining about the refinery’s pricing strategies.
“They wrote to His Excellency, the president, claiming that we are disturbing the market by dropping our prices,” Edwin disclosed.
He explained that in response to market dynamics, the refinery reduced prices twice to encourage sales, but this only led to further resistance from the marketers, who accused the refinery of undercutting the market.
Edwin further said since that local marketers have been blocking the distribution of their products within the country, the refinery has been exporting most of its petroleum products.
Edwin said that the refinery can produce up to 54 million liters of refined petroleum products per day, depending on crude oil supply.
However, local crude supplies have been inconsistent, forcing the refinery to rely on imported crude from countries like the U.S. and Brazil.
This situation has been exacerbated by international oil companies (IOCs) prioritizing foreign markets, often selling crude oil at prices significantly above the market rate for local buyers
He added that the refinery’s production capacity is more than sufficient to meet Nigeria’s petroleum needs. He stated that 44% of the refinery’s output is enough to cover 100% of the country’s demand for refined products.
The Dangote Refinery which commenced operations in March supplied diesel and aviation jet fuel in April, and it is expected to begin the supply of premium motor spirit (PMS) this month (September).
Aliko Dangote, Africa’s richest individual, earlier announced that the supply of diesel from his Dangote Refinery has caused a roughly 60% decrease in the commodity’s price in the local market.
The business mogul stated that before the Dangote Refinery began operations, diesel was sold at around N1,700. However, the refinery reduced the price to about N1,000, marking a drop of approximately 60%.
He also noted that despite the exchange rate rising to about N1,500 per dollar, they have managed to keep the price of diesel below N1,200.
Dangote Refinery recently stated that it would export its Premium Motor Spirit (PMS), commonly known as petrol, if the Nigerian National Petroleum Company (NNPC) Limited and other domestic petroleum marketers choose not to purchase it.
It was earlier reported that the value of Nigeria’s import of Premium Motor Spirit (PMS) popularly called petrol in the second quarter of 2024 rose to N3.22 trillion, the highest on record in the nation’s history.
This is according to the foreign trade report published by the National Bureau of Statistics (NBS).
Imports of petrol in the second quarter of 2024 constituted 25% of total imports in the period. Furthermore, the N3.2 trillion petrol import bill in Q1 2024 marks a 100% increase in the value of petrol import compared to the same period of 2023 which stood at N1.6 trillion.
In the first quarter of 2024 so far, the value of petrol imports reached N2.6 trillion while cumulatively in the first six months of the year, the country’s petrol import bill stood at N5.8 trillion.
When compared to the same period of 2023, the country’s petrol import bill has increased from N3.1 trillion to N5.8 trillion. This denotes an increase of 87.09% during the period.