Dangote Refinery: Why Loading Fuel by Road is Cheaper than Sea
By Patience Ikpeme
The Dangote Petroleum Refinery has disclosed that it is working hard to keep the price of petrol and diesel low for Nigerians.
However, the refinery warned that the way oil markers choose to move fuel from the refinery to their stations can either make the price go up or keep it down for the common man.
In a statement released by the refinery, the management said they have built a world-class loading station with 91 bays that can load 2,900 tankers every single day. This facility works 24 hours a day and can send out over 50 million litres of petrol and 14 million litres of diesel daily.
The refinery pointed out that loading fuel directly into tankers at their gate is the cheapest way to do business. They explained that using ships to move fuel across the sea, especially within Lagos, adds extra costs like port charges and ship fees that do not help the final buyer.
According to the refinery, moving petrol by sea can add as much as N75 to the cost of one litre. They said if marketers keep using ships instead of tankers, the price of petrol at the pump could stay high, close to N1,000 per litre.
“Reliance on coastal delivery, particularly within Lagos, may introduce avoidable costs with material implications for fuel pricing, consumer welfare and overall economic wellbeing. In our opinion, coastal logistics can add approximately N75 per litre to the cost of petrol, which, if passed on to consumers, would push the pump price of PMS close to N1,000 per litre,” the refinery stated.
The refinery calculated that if Nigeria continues to depend on moving fuel by sea, it could cost the country about N1.752 trillion extra every year. They said this huge money would eventually be paid by the Nigerian people through higher fuel prices.
To make things even better, the refinery suggested that the government and private sector should fix the country’s pipelines. They argued that if fuel flows through pipes directly to depots across Nigeria, it would be much cheaper and more reliable than using trucks or ships.
The refinery also addressed rumors that it is importing finished petrol from abroad. They described these claims as lies. They explained that they only bring in raw materials to help their production while one of their machines is being serviced, which is a normal practice for refineries worldwide. They challenged anyone who has proof that they are importing finished fuel to show it to the government.
The company noted that since they started working, the price of diesel has dropped from N1,700 per litre to less than N1,000. They also said petrol prices have come down from N1,250 to between N839 and N900 in many places.
By producing fuel at home, the refinery said it has helped the Naira become stronger because Nigeria does not need to look for too many dollars to buy fuel from other countries. They asked marketers and the government to make choices that will protect the pockets of Nigerians and keep fuel prices stable.
