Dangote Explains Why Petrol Remains Expensive Despite $20bn Refinery
Aliko Dangote, President of Dangote Industries Limited, has explained why petrol prices remain high in Nigeria despite the operation of his $20 billion refinery in Lagos.
Dangote attributed part of the situation to the continued smuggling of petrol from Nigeria into neighbouring countries, where the product is sold at higher prices.
The businessman spoke in an interview aired by Arise TV on Tuesday while discussing petrol prices, petroleum product supply and the potential impact of the ongoing crisis in the Middle East.
According to him, describing petrol as expensive requires comparing its price with those in neighbouring countries.
“You know, expensive is relative. In the sense that today, maybe, you know, a lot of them, there’s ignorance also. What they need to do is ask, what is the neighbour’s price?” Dangote said.
He said petrol prices in some neighbouring countries are between 30 and 50 per cent higher than in Nigeria, creating an incentive for traders to move the product across the borders for higher returns.
“I don’t know if you know that there’s still a lot of smuggling of the same petrol we are producing to our neighbouring countries,” he said.
Dangote specifically cited Niger Republic, saying petrol sold in Nigeria for about N1,350 per litre could fetch between 20 and 25 per cent more across the border.
“And people can now go and ask, okay, fine, what is the price of, even now at N1,350? Okay, the price in Niger is 20 to 25 per cent more than Nigeria,” he said.
He explained that the price disparity could encourage the diversion of petrol meant for the Nigerian market to border communities.
“So, it means that, yes, you take the [petrol], you go and take it across the border. You pretend you are taking it to Sokoto, you go and just take it to Ilela, and you sell,” Dangote said.
The comments come after the Dangote Petroleum Refinery increased its petrol gantry price from N1,265 to N1,350 per litre in July, with some filling stations subsequently adjusting their pump prices.
The increase renewed concerns about the impact of domestic refining on petrol prices and whether local production would significantly reduce the cost of petroleum products for Nigerian consumers.
Nigeria had for decades relied heavily on imported refined petroleum products despite being a major crude oil producer. The commencement of large-scale operations at the Dangote refinery was expected to reduce the country’s dependence on imports.
However, Dangote has maintained that domestic refining does not completely shield the Nigerian market from international developments, as crude oil prices, foreign exchange movements, logistics and other market factors continue to influence the cost of petroleum products.
He also warned that the ongoing crisis in the Middle East could pose a bigger challenge to the global petroleum market, saying the major concern could shift from price to product availability.
“And the problem now, going forward, I must also warn that this crisis in the Middle East is not even about price; it’s about availability,” he said.
Despite the concerns, Dangote assured Nigerians that his refinery would continue supplying the domestic market.
“We will deliver to Nigeria. Nigerians don’t need to worry. There will not be any shortage from our own part.
“There won’t be any shortage. There will not be any queues. We will make sure that we keep satisfying the market, despite all odds,” he added.
The Dangote refinery has become a major source of refined petroleum products for Nigeria and has also expanded its activities into international markets.
The latest comments came shortly after the commencement of the public offering of shares in Dangote Petroleum Refinery and Petrochemicals.
The initial public offering was formally launched at the Nigerian Exchange Limited in Lagos on Monday.
The offer comprises 4.1 billion ordinary shares priced at N525 per share, with the company targeting N2.15 trillion. The minimum subscription is 10 shares, valued at N5,250.
The offer is open to retail and institutional investors as well as eligible African investors, with the subscription period scheduled to close on October 13, 2026.
