We can’t do that – Dangote speaks on rising fuel price

Aliko Dangote, the President of Dangote Industries Limited, addressed the rising fuel prices during an interview on Arise Television. He explained that his refinery cannot sell petrol below the current market price due to increasing crude oil and transportation costs. The last price increase occurred when the market price was N1,265 per litre, but importers were unable to sell at this rate without incurring significant losses.

Dangote stated that the company had initially waited for the market price to decrease but had to adjust its pricing as the price continued to rise. He revealed that the refinery had bought crude oil at $124 per barrel in May, but they cannot subsidize everything at this point. To mitigate the impact of rising fuel prices, Dangote announced that the company was providing free transportation of petrol to various parts of the country, including Maiduguri, the South-East, South-South, and Lagos.

This initiative allows consumers in distant locations to save approximately N70 per litre. Additionally, Dangote revealed that the company had invested N1 trillion in 4,000 new 50-litre tankers to facilitate the distribution of petroleum products without incurring transportation costs for customers. The company is also planning to return N90 billion to consumers annually.

Despite these measures, Dangote emphasized that the refinery cannot sell petrol at a price lower than the traded market price, as they are not receiving crude at a discounted rate. He further explained that the company is paying substantial premiums for crude transportation, citing the cost of moving crude from Focados to Lagos, which can exceed $4 million for less than one million barrels of crude on a journey that should typically take only half a day.