President of Dangote Industries Limited, Aliko Dangote, has explained why petrol remains expensive in Nigeria, saying the price gap between Nigeria and neighbouring countries encourages the smuggling of the product across the borders.
Dangote said petrol sells for about 30 to 50 per cent more in some neighbouring countries, making it profitable for traders to move the product out of Nigeria for higher returns.
He spoke in an interview aired on Arise TV on Tuesday while discussing petrol prices, supply and the possible impact of the ongoing crisis in the Middle East.
According to Dangote, the cost of petrol in Nigeria should be compared with prices in neighbouring countries before determining whether the product is expensive.
“You know, expensive is relative. In the sense that today, maybe, you know, a lot of them, there’s ignorance also. What they need to do is ask, what is the neighbour’s price?”
He said the difference in prices had continued to encourage the movement of petrol from Nigeria into neighbouring countries.
“I don’t know if you know that there’s still a lot of smuggling of the same petrol we are producing to our neighbouring countries.”
Dangote noted that petrol prices in those countries were between 30 and 50 per cent higher than in Nigeria, creating an opportunity for traders to make quick profits.
“Because those neighbouring countries are about 30 to 50 per cent more expensive than Nigeria. So, it’s not actually like for like.”
He specifically mentioned Niger, where he said petrol was selling for 20 to 25 per cent more than in Nigeria.
Using the price of N1,350 as an example, Dangote said the difference could make moving petrol across the border more attractive to traders.
“And people can now go and ask, okay, fine, what is the price of, even now at N1,350? Okay, the price in Niger is 20 to 25 per cent more than Nigeria,” he said.
He questioned how many legitimate businesses could offer such an immediate return.
“So, what business are you going to do that will make you have an instant 25 per cent return?” he asked.
Dangote also explained how petrol meant for the Nigerian market could be moved towards the borders and sold in neighbouring countries.
He said traders could claim they were transporting the product to another part of Nigeria before taking it across the border.
“So, it means that, yes, you take the, you go and take it across the border. You pretend you are taking it to Sokoto, you go and just take it to Ilela, and you sell.[petrol]
“Actually, they don’t have.”
According to him, the situation can affect the amount of petrol available to Nigerian consumers because some of the product is diverted to countries where it can be sold at a higher price.
However, Dangote said the Middle East crisis could create another concern for Nigeria’s petroleum market, as the issue may go beyond the price of petrol to its availability.
“And the problem now, going forward, I must also warn that this crisis in the Middle East is not even about price; it’s about availability,” Dangote said.
On concerns over petrol supply, he assured Nigerians that the Dangote refinery would continue to meet domestic demand.
“We will deliver to Nigeria. Nigerians don’t need to worry. There will not be any shortage from our own part.
“There won’t be any shortage. There will not be any queues. We will make sure that we keep satisfying the market, despite all odds,” Dangote added.