Aliko Dangote, President of Dangote Industries Limited, has explained that the recent reduction in petrol prices was a direct response to the dynamics of market forces.
The price of Premium Motor Spirit (PMS), commonly known as petrol, was reduced to N899.50 per litre at Dangote’s loading gantry, following a shift in the competitive landscape of the downstream sector.
In a candid interview featured in an Arise TV documentary, Dangote elaborated on the price reduction, noting that the move was primarily driven by the market.
He also emphasised that, as the owner of the multi-billion dollar refinery, it is his duty to protect the interests and investments of the company.
“The price reduction is a response to the market, let me just put it that way. It is a refinery where we invested over $20bn, and I think we have to try and protect our interests and also our investments,” Dangote said.
The price reduction came into effect on 19th December 2024, when Dangote’s refinery lowered its ex-depot price of petrol from N970 to N899.50 per litre.
This prompted a chain reaction, forcing the Nigerian National Petroleum Corporation Limited (NNPCL) to lower its ex-depot price to N899 per litre as well. In addition, the Dangote refinery formed a partnership with MRS Petrol Stations to sell petrol nationwide at N935 per litre, a move that has been welcomed by Nigerians.
Dangote further discussed the significant impact of the Dangote Refinery, which has the capacity to refine 650,000 barrels per day, on the Nigerian economy.
He explained that by reducing the country’s reliance on imported petroleum products, Nigeria would ease pressure on its foreign exchange reserves.
“40 per cent of our demand on foreign exchange is through people dealing in petroleum products, and the more we allow imports to come in, the more we keep using most of our foreign exchange out of the country,” Dangote said.
He also acknowledged the inevitability of criticism, stating that no matter the project, there would always be those who criticise. However, he expressed confidence that the Dangote Refinery will bring positive change to Nigeria’s oil sector and overall economy.
“Criticism will not stop us from continuing with what we are doing. I did this project because of my love for my country and to make sure that I have a legacy project,” Dangote remarked.
“If I invested this money in Google or Apple, my investment would be more, and I wouldn’t be having the headache that I’m having today.”
Dangote, who described his investments as a legacy project rather than a pursuit of personal wealth, also defended his position on the $1bn investment by the NNPC in the refinery, calling it “a drop in the ocean” in comparison to the $20bn refinery.
“When NNPC said, ‘Give us one more year, we want to change the agreement, we would rather pay you cash,’ we gave them one more year. So from June last year to June this year, I called NNPC, and they gave us a week,” he explained.
“But when the payment was due, NNPC decided to back out of the transaction abruptly. I said, okay, fine. We just walked away and continued. But we still went ahead, we finished our refinery, and our refinery is operating.”
In response to circulating rumours that NNPC had provided financial assistance to Dangote’s refinery during a liquidity crisis, he dismissed these claims as “cheeky and nasty,” insisting that they were false.
The Dangote Refinery is currently refining 350,000 barrels per day, with plans to reach its full capacity of 650,000 barrels per day as operations ramp up.
Devakumar Edwin, Vice President of Dangote Industries, revealed that the refinery has access to more crude oil than is required for its current operations.
“The Nigerian crude production is more than double our requirements, so there is more than enough crude within Nigeria,” Edwin said.
As Dangote continues to lead the way in transforming Nigeria’s oil sector, the significant reduction in petrol prices is expected to stimulate competition and provide consumers with more affordable fuel options, further solidifying Dangote’s vision of creating a sustainable energy future for the country.
