President and Chief Executive of Dangote Industries Limited, Aliko Dangote, has said petrol is still being smuggled from Nigeria into neighbouring countries despite the recent surge in domestic prices, arguing that price differentials continue to make cross-border diversion profitable.
Speaking in an interview with ARISE News, Dangote said Nigerians assessing the cost of petrol should consider prices across neighbouring markets, where he maintained that consumers were paying substantially more.
His comments came after the Dangote Petroleum Refinery increased its petrol gantry price from ₦1,265 to ₦1,350 per litre, effective September 12, amid elevated international crude and petroleum product prices.
Pump prices subsequently climbed to as high as ₦1,395 per litre at some filling stations in Lagos, although prices varied among retailers.
Asked why petrol remained expensive for Nigerians despite the country now refining fuel domestically on a large scale, Dangote argued that the cost was relative when compared with prices elsewhere in the region.
“The expensive is relative,” he said.
“What they need to do is to ask, what is the neighbours’ price? I don’t know whether you know that there’s still a lot of smuggling of the same petrol into neighbouring countries.”
Dangote said petrol in countries bordering Nigeria could cost between 30 and 50 per cent more, creating an incentive for smugglers even after the latest domestic price increases.
“Those neighbouring countries, they are about 30% to 50% more expensive than Nigeria,” he said.
He specifically cited Niger Republic, saying the price differential remained significant even with Nigerian petrol at ₦1,350 per litre.
“Even now at ₦1,350, the price in Niger is 20%, 25% more than Nigeria,” Dangote said.
Available regional price data, however, does not readily support that specific comparison. GlobalPetrolPrices, which says its retail figures include taxes and fees and are updated weekly, recorded Niger’s petrol price at 499 CFA francs per litre as of September 7. Currency conversion and differences between Dangote’s wholesale gantry price and retail pump prices also complicate a direct comparison.
Dangote nevertheless argued that where substantial price differentials exist, the potential margin is large enough to encourage illegal movement of petroleum products across Nigeria’s borders.
“What business are you going to do that will make you have instant 25% on return?” he asked.
“So it means that, yes, you take the risk to go and take it across the border. You pretend you are taking it to Sokoto, you go and just take it to Illela, and you succeed.”
Dangote said smugglers were exploiting differences between Nigerian and neighbouring markets despite the removal of the petrol subsidy that had historically made cross-border diversion particularly lucrative.
His remarks also address expectations that domestic refining should automatically translate into cheap petrol, with Dangote arguing that locally refined products remain exposed to international crude and petroleum product prices.
He said the refinery could not sustainably sell below international market prices while purchasing crude at prevailing global rates and, in some instances, paying premiums.
The refinery’s latest increase came amid elevated international crude prices and disruptions to oil supplies linked to the continuing Middle East crisis.
Dangote said the refinery was seeking to cushion consumers through measures including free nationwide fuel delivery, which he said could save marketers transporting products to distant parts of the country as much as ₦70 per litre.
He also warned that the continuing Middle East crisis could turn the global energy challenge from one principally about price into one about the physical availability of petroleum products.
Dangote nevertheless assured Nigerians that the refinery would continue prioritising domestic supply despite disruptions in global energy markets.
“Nigeria should not worry that there will not be any shortages from our own part,” he said.
“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.”
Demola Ojo
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