Africa’s richest man and President of the Dangote Group, Aliko Dangote, has claimed that petrol produced at his Dangote Refinery is 15% cheaper than the fuel imported by the Nigerian National Petroleum Company Limited (NNPCL).
Speaking in an interview with Bloomberg Television on Monday, Dangote cleared the air on the pricing controversy surrounding locally-produced petrol from his refinery.
This statement comes weeks after the NNPCL disclosed that it had purchased fuel from Dangote’s refinery at N898 per litre. The news had led to a spike in petrol prices across Nigeria, with prices rising to between N950 and N1,100 per litre at filling stations across the country.
The announcement caused confusion in Nigeria’s oil and gas sector. It raised questions about why fuel prices were still high if the country now had a functioning local refinery capable of producing petrol.
The Dangote Refinery, which has been touted as the solution to Nigeria’s long-standing dependence on imported petroleum products, began operations in 2023. Nigerians had been hopeful that locally-produced petrol would help reduce prices at the pump.
However, the NNPCL’s purchase of Dangote’s petrol at nearly N900 per litre and the subsequent price hikes left many confused and frustrated.
During the interview, Dangote explained that the NNPCL also imported a large quantity of petrol around the same time it bought fuel from his refinery. According to him, the price Nigerians are seeing at the pump includes the costs associated with importing fuel.
“They [NNPCL] bought about 800,000 metric tons of gasoline from abroad, and that fuel was more expensive than what we sold to them,” Dangote said. “The one they bought from us is cheaper than the one they are importing.”
He further clarified that the N898 per litre price tag was not the real price of his petrol. According to Dangote, what the NNPCL announced included profit margins and other operational costs that the state-owned company added to the base price.
“What they have announced is most likely what it cost them, including profit and other expenses,” Dangote said. “But the people don’t know how much they spend in terms of imports.”
He insisted that petrol from his refinery is about 15% cheaper than the imported gasoline that NNPCL brings into the country.
The controversy over petrol pricing has left many Nigerians baffled, especially as the country battles high inflation and economic challenges.
Nigerians have long endured a rollercoaster ride when it comes to fuel prices. In June 2023, President Bola Tinubu’s government scrapped the fuel subsidy, causing prices to triple overnight. The subsidy had been in place for decades, keeping fuel prices artificially low but costing the government billions of dollars every year.
Dangote had previously been vocal in his support for the removal of fuel subsidies. During the Bloomberg interview, he reiterated his stance, stating that removing the subsidy completely was the best solution for Nigeria in the long run.
“They [the government] can announce that they will remove subsidy, which is okay, everybody will adjust,” he said.
Meanwhile, petrol marketers have revealed that they are purchasing NNPCL’s imported fuel at an average price of N870 per litre. This has led to significant frustration for many Nigerians, who feel the high cost of fuel is worsening their living conditions.
The removal of the fuel subsidy has pushed up transportation costs, food prices, and overall inflation, making life more difficult for ordinary Nigerians. As a result, there has been pressure on both the government and the private sector to reduce petrol prices.
The NNPCL has not yet directly responded to Dangote’s claims that its imported fuel is more expensive than the petrol produced at the Dangote Refinery.
The Dangote Refinery, located in Lagos, is Africa’s largest oil refinery and the biggest single-train refinery in the world. It has the capacity to refine 650,000 barrels of crude oil per day. Many Nigerians had hoped that the refinery would help reduce the country’s dependence on imported fuel and stabilize local prices.
Before the refinery began operations, Nigeria imported over 90% of its refined petroleum products, despite being one of the world’s largest producers of crude oil. The country’s reliance on imported fuel has been one of its biggest economic challenges, leading to recurring fuel shortages and price fluctuations.
The opening of the Dangote Refinery was hailed as a turning point for Nigeria. Experts believed that it would boost the local economy, create jobs, and lower fuel prices by reducing the need for costly imports.
However, the recent developments have sparked debates about whether the refinery will indeed bring down prices or if other factors—such as international crude oil prices, logistics, and profit margins—will keep prices high.
