The chairman of the Dangote Group, Aliko Dangote, has stated that his $20 billion, 650,000 barrel-per-day refinery in Lagos will cause the price of fuel to soar, even as the price of diesel in Nigeria falls.
At the recent Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas, Dangote made this revelation.
When asked if his refinery will lower the average pump price of gasoline, which is N700 per litre, Dangote declined to comment, citing the price of diesel falling from N1,700 to N1,200 as a result of his fuel flooding the Nigerian market.
He mentioned that the present capacity of his refinery to store refined petroleum products is 4.78 billion litres.
“There’s no denying that the petrol issue is distinct. The government is taking care of that one. I’ll give you an example, though. When we first started, diesel—which is consumed by industries, transporters, and everyone else—was N1,700; at that time, the dollar was worth roughly N1,200. We reduced the price to N1,000 as soon as we began, and within two weeks.
We reduced the price by more than sixty percent, from N1,700 to N1,200, and then again from N1,200 to N1,700.
The price is still less than N1,200 even though the value of the currency has now returned to almost N1,500 per dollar. An improvement of N1,700 to N1,200 is rather noticeable. Furthermore, diesel is readily available; we are no longer living in extreme poverty.
Regarding a potential reduction in the price of petrol, Dangote responded.
It is extremely risky that the nation lacks strategic petrol reserves. However, we only had 4.78 billion litres of varied tankage capacity in our plant when you arrived. However, we are now adding 600 million more.
“Therefore, going forward, the refinery will serve as the nation’s strategic reserve for petroleum products,” he said.
Dangote claimed that foreign oil firms did not want him to prosper, which is why they would not sell crude oil to his refinery.
And I believe that’s what we’re actually going through right now. However, the country, the subregion, and the continent of sub-Saharan Africa do, in fact, require this refinery. You thus anticipate that they will fight through a lack of crude supplies and product purchases, but in my opinion, this is all only temporary. We shall succeed,” he continued.
Recall that the US supplied Dangote Refinery with 24 million barrels of crude oil each month.
As a result, the refinery changed its June start date for petroleum delivery to July 10–15, 2024.
