Gabriel Idahosa, President and Chairman of the Lagos Chamber of Commerce and Industry (LCCI), has clarified that the Dangote Refinery has no role in determining the retail price of Premium Motor Spirit (PMS), commonly known as petrol, at filling stations.
His statement comes as the nation faces a significant increase in petrol pump prices, with some retail outlets of the Nigerian National Petroleum Company Limited (NNPCL) selling fuel for as high as N897 per liter.
Speaking during an interview on Channels Television on Thursday, Idahosa addressed the growing public concerns linking Dangote Refinery to the recent price hikes in petrol.
As the Dangote Refinery began rolling out its PMS product, there has been confusion and speculation about the impact the refinery might have on the retail price of fuel across the country.
Idahosa, however, emphasized that the refinery’s role is strictly as a supplier of refined products and not as a price setter at fuel stations.
During the interview, Idahosa stressed that the responsibility for setting fuel prices at the pump lies with petrol marketers and the NNPCL, not with refineries like Dangote.
“Dangote is not a petroleum retailer. It does not have a petrol station. No refinery has business with the price petrol is bought at the filling station,” he explained, further clarifying the misunderstanding surrounding the refinery’s involvement in fuel pricing.
Idahosa highlighted that Dangote Refinery operates like any other manufacturer or factory, setting what is known as an “ex-factory price” for its products.
The ex-factory price is the cost at which the refinery sells its refined products, including PMS, to potential buyers such as the NNPCL or other petrol marketers.
From there, these buyers set their retail prices based on various factors, including transportation costs, taxes, profit margins, and other market dynamics.
“Dangote is a factory and has an ex-factory price. Whosoever wants to buy, whether NNPCL or anybody, can go to Dangote Refinery to buy.
“Dangote Refinery has no business announcing any price to anyone. It can only communicate to interested buyers,” Idahosa stated.
This clarification by the LCCI President seeks to dispel public misconceptions and ensure that Dangote is not unfairly blamed for the increase in fuel prices across the country.
“We should stop putting Dangote in a situation he should not be,” he said, urging Nigerians to direct their frustrations toward the appropriate entities responsible for price setting, particularly the NNPCL and other fuel marketers.
The recent spike in petrol prices across Nigeria has reignited debates about the nation’s petroleum industry and its reliance on fuel imports despite having local refineries like Dangote Refinery, which is the largest in Africa.
As the NNPCL increased pump prices to nearly N900 per litre in some locations, Nigerians have been left wondering why the Dangote Refinery’s operations haven’t led to lower fuel prices as many had hoped.
Analysts say that there are several factors that contribute to the rising cost of petrol in Nigeria, some of which are beyond the control of local refineries.
One of the main reasons is the global price of crude oil, which directly impacts the cost of refined petroleum products like PMS.
As a country that has historically imported a significant portion of its fuel, Nigeria is subject to international oil market fluctuations.
Although the Dangote Refinery is expected to help reduce reliance on imports in the long term, it is still tied to global oil prices for its raw materials.
Additionally, the deregulation of the Nigerian petroleum market means that prices are now largely determined by market forces.
This has led to concerns that petrol marketers and distributors may set higher prices to cover their operational costs and profit margins, particularly in a challenging economic environment where the value of the naira is weak against the dollar.
The Dangote Refinery has been hailed as a potential game-changer for Nigeria’s energy sector, with the capacity to process 650,000 barrels of crude oil per day.
It was designed to reduce Nigeria’s dependence on imported fuel, save foreign exchange, and create jobs.
Many Nigerians had high hopes that the refinery’s operations would lead to a dramatic reduction in the cost of petrol, especially as it supplies the local market with refined products.
However, as Idahosa pointed out, the presence of a local refinery does not automatically guarantee lower prices at the pump.
“Dangote’s role is to refine and sell fuel at the factory gate. What happens after that – how much it is sold for, what the price is at filling stations – is not within the control of Dangote Refinery.”
