Petrol still smuggled despite increase in domestic price — Dangote

President of Dangote Industries Limited, Aliko Dangote, has said petrol is still being smuggled from Nigeria into neighbouring countries despite the recent increase in the domestic price of the product.

Dangote said the price difference between Nigeria and neighbouring countries continues to make cross-border smuggling profitable.

He spoke in an interview with Arise News on Tuesday, amid the latest increase in petrol prices following a rise in the Dangote Petroleum Refinery’s gantry price to ₦1,350 per litre.

According to him, petrol prices in neighbouring countries remain about 30 to 50 per cent higher than Nigeria’s, creating an incentive for smugglers to move the product across the borders.

“Expensive is relative. What they need to ask is, what’s the price in the neighbouring countries?” Dangote said.

He said petrol was still being moved from Nigeria into neighbouring markets despite the higher domestic price.

Using Niger Republic as an example, Dangote said petrol selling for ₦1,350 per litre in Nigeria was still about 20 to 25 per cent cheaper than in Niger.

“Even now at ₦1,350, the price in Niger is 20 to 25 per cent more than Nigeria,” he said.

Dangote said the price gap offered smugglers an opportunity to make substantial returns by moving petrol across the border.

“So what business are you going to do that will make you have an instant 25 per cent return?” he asked.

The comments came after the Dangote refinery increased its petrol gantry price by ₦85, from ₦1,265 to ₦1,350 per litre, effective September 12.

The increase has since been reflected in pump prices across the country, with some major marketers selling petrol at ₦1,375 to ₦1,400 per litre.

In Lagos, MRS filling stations raised their pump price to ₦1,400 per litre from ₦1,300, while NNPC retail outlets moved to ₦1,375 from ₦1,275, according to industry reports.

Dangote also said the refinery was absorbing significant logistics costs to reduce the impact of rising fuel prices on consumers.

He said the refinery could spend about ₦90 billion monthly on logistics when operating at full capacity, amounting to more than ₦1 trillion annually.

“At full scale, we’re going to give ₦90 billion a month, which means ₦1 point something trillion every year,” he said.

Dangote said the logistics intervention included free delivery of petrol to some locations, which he said could save marketers as much as ₦70 per litre in some parts of the country.

He maintained that domestic refining could not completely shield Nigeria from movements in international crude oil prices, noting that the refinery also purchases crude at prevailing market prices.

Dangote said the refinery had initially delayed adjusting its petrol price in anticipation of a decline in international oil prices, but was eventually forced to review its price as crude prices continued to rise.

He, however, assured Nigerians that the refinery would continue to prioritise domestic supply despite the pressure in the international oil market.

“There will not be any shortages, there will not be any queues, and we’ll make sure that we keep supplying the market despite all odds,” he said.