Chairman of the Dangote Group, Aliko Dangote, has shed light on why his refinery sometimes sells fuel at relatively lower prices, saying it is a survival strategy in the face of stiff market challenges.
He gave the explanation while speaking at a conference to mark the first anniversary of the launch of fuel production from the 650,000 barrels-per-day Dangote Refinery.
According to him, the refinery is being forced to operate under tough conditions, especially due to manipulations in the downstream oil market.
He explained that while the refinery has the capacity to supply Nigeria’s fuel needs, the activities of market players who he described as a “mafia” often force prices downward, compelling the refinery to adjust.
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“But that’s not so, because when we were getting suffocated, we would sell as good, we would charge as premium, which is still happening today, and then we would compete with the Russian product,” he said.
Dangote added that the only way to ensure the refinery keeps running is to sell, even if it means making less profit.
“And when we are going to sell, the same team, part of the mafia, they will now price us low. So we sell a bit low because we have to survive. That’s what is happening, that’s massive,” he stressed.
On the refinery’s capacity, the billionaire businessman dismissed claims of supply gaps, insisting that the refinery has what it takes to meet the nation’s fuel demand.
“Do we have enough to supply the country? I am still insisting that yes, we do have enough to supply Nigeria. I don’t believe there’s a difference. The regulator is saying 50 million, nobody can confirm it’s 50 million. And at a point, it was 93 million,” he said.
Dangote maintained that despite the challenges, his refinery remains committed to ensuring Nigeria’s energy security.
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