Dangote refinery to ‘keep lowering prices’ to compete with importers

Aliko Dangote, president of the Dangote Group, says his refinery will continue to reduce the price of petrol to compete with importers of the product.

Dangote spoke with journalists on Monday after meeting with President Bola Tinubu in Aso Rock.

“Prices are going down. The reason why prices have to go down is because we have to also compete with imports,” Dangote said.

“But luckily for us now, the smuggling has reduced — not totally.

“There is still quite a lot of smuggling because the price we have in Nigeria is about 55 percent lower than the price of our neighboring countries.”

He said no matter how tightly the borders are policed, smuggling will continue because of the significant profits, with fuel selling for nearly N1,500 to N1,600 per litre compared to domestic prices of about N800 per litre.

The billionaire said petroleum products (diesel and petrol) “will continue to be sold in the market at a very reasonable price”.

“We are not here to make our $20 billion back quickly, it’s a long term investment,” Dangote said.

Dangote said the refinery had already notified the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of its capacity to supply 50 million litres of petrol daily, a figure the serial investor said above the country’s consumption needs.

“Nigeria has been having fuel queues since 1972 and we have actually removed those queues. It’s not about actually relying on imports. For the first time, we’re actually suppliers to Europe and US,” the billionaire said.

He assured that fuel queues are “gone forever” in the country.

“Even our neighboring countries won’t have queues at all because they can buy from us, but it’ll be official purchases,” Dangote said.

“By February, we’ll be able to supply about 15 to 20 million litres more than the consumption of Nigeria so we still have to export.”

He explained that domestic manufacturers, particularly in the plastics sector, which previously spent about $400 million annually on imports, will now receive full local supply of their feedstock.

‘WE’RE STILL HAVING CHALLENGES IN GETTING CRUDE’

The Dangote Group chairman said the refinery plans to increase capacity to 1.4 million barrels per day (bpd) by 2028, overtaking India’s Reliance refinery, which is currently the world’s largest at 1.25 million bpd.

“We have already launched that. We have signed and we’re going to start piling for the refinery before January ending. It will be delivered on time,” he said.

Dangote also expressed strong support for the naira-for-crude initiative, saying “it’s a win-win situation”.

He also commended Tinubu as well as other key stakeholders for the initiative.

“Yes, it is not really well disturbed. Where we’re having a challenge is getting the crude,” he said.

“Nigeria crude sells at a premium, and so some of the international oil companies are not really ready and willing to sell for us.

“It’s a teething problem, which I believe will be addressed either in the new budget to the government.”

He said the company is striving to make Nigeria the refining hub of Africa to reduce reliance on importation into Africa.