Aliko Dangote, Chairman of Dangote Group, has announced that his $20 billion refinery in Lagos, capable of producing 650,000 barrels per day, will lead to lower fuel prices in Nigeria. He made this statement at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.

While discussing the potential impact of his refinery on the pump price of petrol, which averages N700 per liter, Dangote refrained from giving a definitive answer. However, he cited a significant reduction in diesel prices when his refinery’s diesel entered the Nigerian market, dropping from N1,700 to N1,200 per liter.

Dangote explained that his refinery has a storage capacity of 4.78 billion liters for refined petroleum products. “The issue of gasoline is different and is being handled by the government. But for diesel, when we started, the price was N1,700, and the dollar conversion was about N1,200. Within two weeks, we reduced the price to N1,000. Even with the currency at N1,500 per dollar now, the price is still below N1,200,” he said, emphasizing the significant price drop and improved availability.

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He also highlighted the lack of strategic petrol reserves in Nigeria, which he considers risky. “Our refinery will serve as the country’s strategic reserve for petroleum products,” he added, noting plans to increase storage capacity by 600 million liters.

Dangote pointed out that international oil companies initially refused to sell crude oil to his refinery, aiming to hinder its success. Despite these challenges, he expressed confidence that the refinery would overcome these obstacles.

Due to these issues, the Dangote Refinery has turned to the US for a monthly supply of 24 million barrels of crude oil. Consequently, the commencement of fuel supply has been postponed to July 10-15, 2024, from the initial June date.