President of Dangote Industries Limited, Aliko Dangote, has explained that the complicated dynamics of market forces were the main cause of the recent drop in the price of Premium Motor Spirit, also referred to as fuel, to N899.50 per litre at its loading gantry.
Additionally, he stated that he must protect the multibillion-dollar company’s investments and interests.
“To put it simply, the price reduction is a response to the market. We invested more than $20 billion in this refinery; therefore, I believe we need to attempt to safeguard both our interests and our capital,” he stated.
The ex-depot price of the Dangote refinery’s petrol was lowered from N970 to N899.50 per litre on December 19, 2024.
The downstream industry experienced fierce pricing competition as a result, which compelled the Nigerian National Petroleum Company Limited, NNPCL, to lower its ex-depot price to N899 per litre.
To the pleasure of Nigerians, the refinery also announced that it would be partnering with MRS Petrol Station to offer petrol from its retail outlets countrywide for N935 per litre.
Dangote continued the conversation by restating that the 650,000 barrels per day refinery will revolutionise Nigeria’s overall economy in addition to the oil industry.
He emphasised that the burden on foreign exchange increases when the nation imports petroleum products.
“People who deal in petroleum products account for 40% of our demand for foreign exchange, and the more we allow imports to enter the country—not because I don’t want them, but because most of those letters of credit open for petroleum products and the goods are not coming into Nigeria—the more we continue to use the majority of our foreign exchange out of the country,” he stated.
“No matter what you do, you will always receive criticism. However, I don’t think we can stop people from voicing their opinions.”
Dangote reaffirmed that he was amenable to criticism, stating that “nobody has put in $20 billion in any project in Nigeria’s history over the last 100 years.
“We will keep doing what we are doing notwithstanding criticism. I completed this project to ensure that I had a legacy project and because I love my nation. I would have a larger investment and wouldn’t be experiencing the difficulty I am now if I had placed this money in Apple or Google.”
“Therefore, I believe that my actions were motivated by patriotism. I would prefer to leave a legacy. I’m not wealthy. I’m a rich man. Additionally, wealthy people don’t labour to enrich themselves; rather, they create jobs for the wider public.”
He went on to call the NNPCL’s $1 billion refinery investment “a drop in the ocean.”
“Even $1 billion is a drop in the ocean in a $20 billion refinery,” Dangote stated when he signed the agreement in 2021.
“People didn’t comprehend the $2 deduction on the crude, so when NNPC said, ‘Give us another year, we want to renegotiate the agreement, we would rather pay you cash,’ Is it possible to ensure that it is clear? What do you desire, then? They then suggested that we should give them another year and that they would pay us in cash.
“We extended their time by a year. Thus, June of the current year to June of the previous year. I called NNPC on June 4th or 5th, and they gave us a week.”
According to Dangote, the NNPC abruptly backed out of the arrangement when the payment was due.
“All right, fine,” I said. Simply walking away, we carried on. However, we continued and completed our refinery. “We have our refinery running,” he stated.
“It is very cheeky and nasty for the person who ever came up with that nonsense, saying that NNPC gave us $1 billion to assist us in our liquidity crisis,” Dangote continued.
He went on to say, “These are just lies; it’s not true.”
The facility currently refines 350,000 barrels of petroleum per day, according to Devakumar Edwin, vice president of Dangote Industries Ltd.
“The refinery has a full capacity of 650,000 barrels per day; we are currently operating at about 350,000 because the idea is that we will be profitable once the refinery is fully operational, so there is no point in me pushing at the production level until I start the refinery in its entirety.”Well, Nigeria produces more than twice as much crude as we need. Therefore, there is more crude access in Nigeria,” he added.
