“NNPC bought cheaper from us than the ones they imported, So when they announced our price, it wasn’t the real price” _ Dangote

The CEO of Dangote Refinery, Aliko Dangote has addressed concerns over fuel pricing, clarifying that petrol from his refinery was sold to the Nigerian National Petroleum Company (NNPC) Limited at a rate lower than the cost of imported fuel.

Speaking in a 26-minute interview with Bloomberg Television in New York on Monday, he said the national oil company was simultaneously purchasing petrol from his refinery and importing around 800,000 metric tones of petrol into Nigeria.

Dangote further emphasised that the petrol NNPC imported during this period was significantly more expensive than the fuel sold by his refinery, which has a capacity of producing 650,000 barrels per day.

He said: “What’s going on is not a disagreement per se. NNPC bought from us this particular one on the 15 of September at the international price. They also bought over 800,000 metric tons of gasoline imported.

“The ones they bought from us were cheaper than the ones they imported. So when they announced our price, it wasn’t the real price. What they announced was likely what it cost them including profits and other things. Meanwhile, they’ve never added profit to their cost before.

“And then, the other one is what they imported but the people don’t know how much they spend for importing. But their own importation was about fifteen to 20 percent more expensive than ours. What they first do is to sell at a basket price. If they want to remove subsidy, they can announce that they’ve removed subsidy. Everybody will adjust.”

“We cannot change the price, but I think the government will have to give up something for something. So I think at the end of the day, this subsidy will have to go.”

Recall NNPC had earlier announced that the Dangote Refinery sold petrol to them at N898 per litre after the first batch of offtake from the facility.

In response, the Dangote Group issued a statement refuting NNPC’s claim, explaining that the quoted N890 per litre does not represent the actual national price. According to the group, they sold the petrol to NNPC at a considerably subsidized rate, given the circumstances surrounding their crude oil acquisition.

Dangote Group further clarified that they purchase their crude oil from international suppliers in dollars, and this international market dynamic affects their pricing structure.

Also, the president of Dangote Group said the federal government must end fuel subsidies completely now contending that the removal of subsidies is totally dependent on the government, noting that his refinery can only do little in that respect.

He said that subsidy removal will help to determine the actual petrol consumption in Nigeria and cut the government unnecessary expenditure.

“Subsidy is a very sensitive issue. Once you are subsidising something, then people will bloat the price and then the government will end up paying what they are not supposed to be paying. It is the right time to get rid of subsidies.

“But this refinery will resolve a lot of issues out there, you know. It will show the real consumption of Nigeria, because, you know, nobody can tell you. Some people say 60 million litres of gasoline per day. Some say, it’s less. But right now, if you look at it by us producing, everything can be counted.

“So everything can be accounted for, particularly for most of the trucks or ships that will come to load from us. We are going to put a tracker on them to be sure they are going to take the oil within Nigeria, and that, I think, can help the government save quite a lot of money. I think it is the right time, you know, to remove the subsidy.”

Dangote said petrol imports have contributed to the naira’s steady fall, which his refinery will help to stabilise.

“Petroleum products consume about 40 per cent of our foreign exchange,” Dangote said. He explained that fuel from his refinery “can actually stabilize the naira.”