Oil and gas expert Henry Adigun has highlighted that production costs in US dollars could prevent the $20 billion Dangote Refinery in Lagos from selling Premium Motor Spirit (PMS), or petrol, below the new pump prices set by the Nigerian National Petroleum Company Limited (NNPCL).READ FULL STORY HERE>>>CLICK HERE TO CONTINUE READING>>>
Thank you for reading this post, don't forget to subscribe!Adigun, speaking on Channels Television’s Inside Sources with Laolu Akande, explained that the petrol produced at the Dangote Refinery is of the highest quality, and higher quality often means higher prices.
He noted that the fuel industry operates in dollars, and as the owner of the refinery, Aliko Dangote has the right to set the price for the petrol produced.
Adigun elaborated, “Dangote has to manage costs. He receives only 40% of his crude oil from NNPC and must purchase the rest from international sources. His refinery is a single-train facility, meaning it cannot use just one type of crude oil to produce all products; blending with other crudes is required. This adds to the cost, as does the fact that Dangote took out loans in dollars and must repay them in dollars.”
When asked if Dangote might price petrol at N700 per litre, Adigun responded, “That’s unlikely. Based on my calculations, petrol from his refinery is unlikely to be priced below N850 per litre, considering additional retail costs.”
Nigeria, Africa’s most populous country, struggles with energy issues, with all state-owned refineries currently inactive and heavy reliance on imported refined petroleum products. Fuel queues are common, and petrol prices have surged from around ₦200 per litre to about ₦800 per litre since the removal of subsidies in May 2023, exacerbating challenges for citizens reliant on petrol for vehicles and generators amid unreliable electricity supply.
Dangote’s $20 billion refinery, which began operations last December with a capacity of 350,000 barrels per day, aims to reach its full capacity of 650,000 barrels per day by the end of the year. The refinery has begun supplying diesel, aviation fuel, and now petrol.
NNPCL outlets nationwide have increased petrol prices from around N600 to over N900 per litre. Dangote has indicated that once final arrangements with NNPCL are complete, his refinery’s products will be available on the market, with NNPCL planning to start sourcing fuel from Dangote Refinery in mid-September.READ FULL STORY HERE>>>CLICK HERE TO CONTINUE READING>>>
