The high price of petrol in Nigeria is partially caused by the ongoing smuggling of the commodity to neighbouring countries where it sells at a much higher price, Aliko Dangote, President of Dangote Industries Limited, said.
Dangote claimed petrol prices in neighbouring countries were 30-50 per cent higher than in Nigeria. The price disparity gives a huge financial incentive for traders to transport petrol out of the nation, he said.
This is as he spoke on the price of petrol and availability of the product while the situation in the Middle East rages in an interview on Arise TV today.
Dangote explained that Nigerians would think the gas price extortionate, although the country produces the commodity locally. “We do not look at the price in isolation, we look at the neighbouring countries.
“Expensive is relative, you know. You know, a lot of people, there’s ignorance also, maybe, now, in the sense that “All they need to do is enquire, what is the price of the neighbour’s?
The ongoing flow of Nigerian petrol across the borders, he claimed, was partially powered by the huge gap between home pricing and those attainable in surrounding nations.
“I don’t know if you know that there is still a lot of smuggling of the same petrol we are producing to our neighbouring countries.
The price difference means that petrol bought in Nigeria may be sold over the border for a fat profit.
This, he claimed, encourages traffickers to syphon petrol meant for the Nigerian market instead of selling it locally.
“Because those neighbouring countries are about 30 to 50 per cent more expensive than Nigeria. So it’s not really like for like.” Encyclopedias & Dictionaries
Niger was one such country, where he said petrol was going at a premium of 20 per cent to 25 per cent over Nigeria.
He gave the example to show why the border trade might be profitable, particularly when the price differential is high enough to provide an instant return on the product.
“And people may now go and ask, alright, great, what is the price of, even today at N1,350? “In Niger, the price is 20 to 25 percent higher than Nigeria,” he stated.
“Where else can you get that kind of return on a legit business right away?” he said.
“And what business are you going to do that gives you an instant 25 per cent return?” he said.
Dangote also explained how petrol meant for local consumption may be diverted and sold at the border to purchasers in bordering countries.
“So it implies, OK, you take the [petrol], you go and take it across the border. “So you say you are taking it to Sokoto, you go, and merely take it to Ilela, you sell.
“They don’t, actually.”
“This means that a product that should be available to Nigerian consumers can be taken out of the country because of the higher prices across the border,” Dangote said. Oil & Gas
However, aside from the price issue, Dangote warned the present turmoil in the Middle East could provide a distinct challenge to the Nigerian downstream sector.
He warned that the key issue would change from the price of petrol to whether consumers would get enough of it.
“And the problem now, going forward I must also warn that this crisis in the Middle East is not even price, it’s availability,” added Dangote.
The comment comes amid growing concerns about the impact of developments in the Middle East on global energy markets, notably the availability and price of petroleum products.
Asked if Nigerians should be concerned about petrol shortages, Dangote said the Dangote refinery was ready to continue to supply the local demand.
We are going to deliver to Nigeria. Nigerians should not be afraid. On our part we shall not be wanting.
“There won’t be a shortage. There will not be any queues. “By the grace of God, we will continue to satisfy the market, all things being equal,” Dangote said.
The comments came on the back of a surge in investor interest on the Nigerian Exchange yesterday following the commencement of the initial public offering of Dangote Petroleum Refinery and Petrochemicals. Oil & Gas 1
The N2.15tn IPO was formally opened with Dangote hitting the gong to signal the start of the offer during the opening gong ceremony at the NGX trading floor in Marina, Lagos.
The refinery is the first petroleum refinery to be made available to investors on the Nigerian stock market in the Exchange’s 66 year existence.
The offer is for 4.1 billion ordinary shares at 525 naira a share, with a minimum of 10 shares at 5,250 naira.
The offer is offered to retail, institutional and qualifying African investors and is expected to close on 13 October 2026.
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