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 on Tuesday, 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.
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.
He 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.
The president also predicted that Nigeria will not see another new refinery built over the next 10 years unless the government creates a more supportive and consistent policy environment for domestic industry.
Dangote said high borrowing costs were already a major impediment, arguing that it was very difficult to industrialise with interest rates at 30%.
