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

Aliko Dangote, president of the Dangote Group, says hisrefinery will continue to reduce the price of petrol to compete with importersof the product. Dangote spoke with journalists on Monday after meeting withPresident Bola Tinubu in Aso Rock. “Prices are going down. The reason why prices have to godown is because we have to also compete with imports,” Dangote said. “But luckily for us now, the smuggling has reduced — nottotally. “There is still quite a lot of smuggling because the pricewe have in Nigeria is about 55 percent lower than the price of our neighboringcountries.” He said no matter how tightly the borders are policed,smuggling will continue because of the significant profits, with fuel sellingfor nearly N1,500 to N1,600 per litre compared to domestic prices of about N800per 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’sa long term investment,” Dangote said. Dangote said the refinery had already notified the NigerianMidstream and Downstream Petroleum Regulatory Authority (NMDPRA) of itscapacity to supply 50 million litres of petrol daily, a figure the serialinvestor said above the country’s consumption needs. “Nigeria has been having fuel queues since 1972 and we haveactually removed those queues. It’s not about actually relying on imports. Forthe first time, we’re actually suppliers to Europe and US,” the billionairesaid. He assured that fuel queues are “gone forever” in thecountry. “Even our neighboring countries won’t have queues at allbecause 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 millionlitres more than the consumption of Nigeria so we still have to export.” He explained that domestic manufacturers, particularly inthe plastics sector, which previously spent about $400 million annually onimports, 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 toincrease capacity to 1.4 million barrels per day (bpd) by 2028, overtakingIndia’s Reliance refinery, which is currently the world’s largest at 1.25million bpd. “We have already launched that. We have signed and we’regoing to start piling for the refinery before January ending. It will bedelivered on time,” he said. Dangote also expressed strong support for thenaira-for-crude initiative, saying “it’s a win-win situation”. He also commended Tinubu as well as other key stakeholdersfor the initiative. “Yes, it is not really well disturbed. Where we’re having achallenge is getting the crude,” he said. “Nigeria crude sells at a premium, and so some of theinternational oil companies are not really ready and willing to sell for us. “It’s a teething problem, which I believe will be addressedeither in the new budget to the government.” He said the company is striving to make Nigeria the refininghub of Africa to reduce reliance on importation into Africa.

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