Business

Why Petrol, Diesel Prices May Not Drop Despite Dangote Refinery — Experts

Published

1 year ago

June 22, 2024

Experts believe that prices of petrol and diesel may not crash significantly despite the commencement of production at the Dangote Petroleum Refinery.

With the removal of subsidy on petrol in May 2023, the price per litre of petrol jumped from around N184 to over N600 depending on the location. Diesel also sells for about N1500 per litre at retail outlets.

Petrol marketers are optimistic that production at Dangote refinery will significantly force down the prices of petrol and diesel.

But the experts said though the behemoth refinery is located in Lagos, Nigeria, the input cost for the operationalisation of the $20bn facility is import-dependent, adding that the volatility of the foreign exchange rates might make it difficult for any marginal reduction in the prices of the premium commodities.

These were the thoughts of the Publisher of Sweet Crude Reports, Hector Igbikiowubo; and Nairametrics Founder, Ugodre Obi-Chukwu; on Inside Sources with Laolu Akande, a socio-political programme aired on Channels Television on Friday.

Both Igbikiowubo and Obi-Chukwu commended Africa’s richest man, Aliko Dangote, for defying all odds to ensure that his dream to build a functional refinery came to life.

They said Dangote demonstrated that the Federal Government has no excuse not to get the country’s four dormant refineries working and urged the Nigerian National Petroleum Company (NNPC) Limited to increase crude supply to the private refinery.

The billionaire business tycoon recently said his refinery would continue to import 24 million barrels of West Texas Intermediate crude due to insufficient local crude production and supply by the state-run NNPC.

The experts said though the private refinery won’t solve Nigeria’s energy security needs, its operations would go a long way in making premium petrol products available in the country.

“The Dangote Refinery cannot solve the problem because the Dangote Refinery will continue to pay for crude oil in USD (United States Dollar),” Igbikiowubo said.

“The question now is how come the NNPC isn’t allotting all of its 445,000 barrels per day to the Dangote Refinery for refining? Why is it convenient to export crude oil when you have a facility like the Dangote Refinery up and running? You make more money if you export refined petroleum products than if you export crude oil.”

Obi-Chukwu agreed with Igbikiowubo that the dominance of the greenback in the operational cost of the Dangote Refinery might not necessarily lower the cost of the refined products for end users.

Obi-Chukwu said, “As much as the refinery is local, most of the input cost for that refinery is still going to be imported. Whether it is the personnel that will service the refinery. Whether it is the spare parts that will be changed and serviced. Even the crude itself is also being imported.

“A lot of the breakdown of the cost still has foreign components in there. So, it is quite unlikely that you might see a substantial amount of savings to the end consumers. Nevertheless, even if we get 10% savings, it is still better than what we currently have.”

The refinery sited in Lagos and owned by the billionaire businessman commenced operations last December with 350,000 barrels a day. The refinery hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.

The refinery has begun the supply of diesel and aviation fuel to marketers in the country while petrol supply is expected to commence mid-July.

Energy Security

The experts said though the Dangote Refinery has been operational, the country’s four refineries sited in three locations across the country should be made to function to guarantee energy security for the country.

The four state-owned refineries which are in dilapidated condition are sited up north in Kaduna with three units sited in the southern region – Port Harcourt and Warri. Attempts to get them working for about two decades have not been successful despite billions of naira spent on turnaround maintenance.

The newspaper publishers believe the Bola Tinubu administration should do all in its ability to make the state-owned refineries work.

Igbikiowubo said, “The essence of having the NNPC refineries working is to guarantee energy security for the Nigerian state.”

He said though the NNPC has about 20% stake in the Dangote Refinery, the refinery does not belong to the Nigerian state.

“We should have a coherent energy security in place,” he said. “If you have refineries, those refineries should work.”

Igbikiowubo said privatisation of the state-owned refineries does not guarantee energy security as the private company is interested in profit-making for its shareholders and not necessarily ensuring that the populace gets the premium commodities easily and at cheap rates.

“Where is NITEL today? It was privatised. Where is Daily Times today? It was privatised. We need to be accountable. The money sunk into the refineries, what happened to them?”Igbikiowubo asked.

“Last year, the petroleum minister granted an interview that the Port Harcourt Refinery would be up by December. This is June and nothing has happened. He is not being held to account.”

He said subsidy removal should be predicated on local refining and not import-dependent products controlled by the vagaries of foreign exchange.

“You have a group of persons who are benefitting with the status quo and they will do everything to ensure the status quo remains,” said the Sweet Crude Reports publisher.

‘Privatise With Clear Mandate’
The publisher of Nairametrics posited that privatisation can work – and it has worked before in other sectors of the country – if done the right way.

“We’ve practiced one model before, the government trying to run the refineries. It hasn’t worked. What we see now is funds being misappropriated from the very limited funding space that we have as a country and these funds are being squandered. So, there is no point. The same thing with the Ajaokuta Steel.

“You have to privatise properly with a clear mandate and key performance indicators including public list on the Nigerian Stock Exchange (NSE),” he said.

He urged the government to set the right policies to allow private businesses to flourish in the country.

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Business

‘We Like Greek Gifts,’ Nigerians Blast NUPENG Over Dangote’s Fuel Price Reduction

Published

1 day ago

September 13, 2025

Editor

The decision of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) to warn Nigerians against accepting Dangote Refinery’s recent fuel price reduction has drawn heavy backlash on social media, with many citizens mocking the union and embracing what they described as “much-needed relief.”

Dangote had announced lower petrol pump prices in several states alongside a new scheme to deploy compressed natural gas (CNG) trucks directly to filling stations, a move expected to reduce logistics costs.

But NUPENG dismissed the offer as a “Greek gift,” alleging that the refinery was undermining workers’ rights, sidelining the union, and pushing drivers into a rival association.

However, netizens have lambasted the union, querying that during hard times, NUPENG has never supported the masses.

On X (formerly Twitter), Nigerians quickly turned NUPENG’s warning into a trending topic, using humour and sarcasm to lampoon the union.

Oloye Somorin Osifeso (@OloyeSomorin) wrote: “We like Greek gifts in my garage.”

Just Jude (@JustJude) asked bluntly: “Is it your deception?”

Oladele (@Oladele) quipped: “As Dangote Refinery dey offer Nigerians Greek gift, why can’t NUPENG too offer Nigerians French gift?”

Agbalaka (@Agbalaka) queried: “Can they tell Nigerians what exactly they are fighting about?”

CBN Gov Akinsola (@Akinsola) joked: “Then give us Trojan gift now 😆. Man do man. Man no go vex.”

Omobalaji (@Omobalaji) teased: “NUPENG, oya surprise us with Arabian gifts.”

Habdulakeem Bahdmus (@BahdmusHabdulakeem) added: “If Dangote is showering Nigerians with Greek gift, NUPENG can also set up a Roman gift now.”

Femi Yekinni (@FemiYekinni) steered it back to reality: “We thank them for their advice. Now, @DangoteGroup pls how do we schedule deliveries to Badagry?”

Curtis Abbi (@CurtisAbbi) slammed the union: “Nigerians will manage the Greek gift. @officialNUPENG9, what gift have you given Nigerians in your entire years of existence? NUPENG should offer Nigerians their own Somalian gift 🤣.”

Akin Adejola (@AkinAdejola) echoed the sentiment: “LOL. I can bet Nigerians don’t mind the gift. NUPENG should gift Nigerians same ‘Greek gift’ too if they have any goodwill. NUPENG is the enemy of progress in the oil & gas sector.”

Adeola Akinwande (@adeolarewaju9) criticised union leaders: “Does NUPENG remember Nigerians at hard times? They have all failed Nigerians the same way the @NLCHeadquarters has failed. They are living big on unionism and cashing out big time. Without unionism, some of their excos are nobody. They should stop the crocodile tears.”

Okunwa U. U. Azikiwe (@OkunwaUUazikiwe) argued: “Competition has created jealousy by the previous monopoly in the sale of fuel. They have lost control, and it is paining them that they are no longer in control. SMH!!!”

Solihull Abdulkareem (@SolihullAbdul) chipped in: “NUPENG or whatever, do you want the market to be monopoly? You’ve been doing what you want for many years. It’s time for change, just accept it and move forward.”

Temidayo (@Temidayo) asked: “It’s a lie. What benefits has your union provided for Nigerians? Middlemen syndrome has been room for corruption. Your association should go and buy shares in Dangote and work together to make Nigeria great.”

And LegalTech Sam Akanbi (@SamAkanbi) summed up: “Nigerians no longer want your Nigerian gift, we want the Greek gift. If you have a better offer, we’d abandon Dangote’s Greek gift and take yours. But for now, let the Greek gift go round.”

Recall that NUPENG earlier alleged that Dangote Refinery was forcing truck drivers to abandon its union for a rival group, the Direct Trucking Company Drivers Association (DTCDA).

The union also accused Dangote of undermining collective bargaining rights and violating a Memorandum of Understanding (MoU) signed under government supervision.

Dangote, however, denies the claims, insisting that union membership remains voluntary and that its delivery scheme is designed to cut costs and ease supply.

The federal government has intervened, with the Ministry of Labour and the Department of State Services mediating between both parties.

Business

Dangote Refinery Reduces Fuel Price Nationwide, Provides Update On Petrol Distribution

Published

2 days ago

September 12, 2025

Editor

Dangote Refinery has reduced its premium motor spirit retail price nationwide.

This is as it announced Monday, September 15, 2025, as the new date to begin the direct petrol distribution initiative.

The initiative, which Dangote Group had earlier announced would kick off on August 15, 2025, would see the $20 billion plant distribute petrol and diesel to consumers with its 4,000 compressed natural gas trucks at zero logistics cost.

The 650,000-barrel-per-day refinery said its new gantry price is N820 per litre, the same price announced last month.

Business

FG Gives Criteria For Opening Bank Accounts

Published

2 days ago

September 12, 2025

Editor

From January 1, 2026, all Nigerians and non-residents will be required to obtain a Tax Identification Number, Tax ID, to open or operate bank accounts.

The development followed the enactment of the Nigeria Tax Administration Act, 2025, recently signed into law by President Bola Tinubu.

Section 8(2) of the Act makes the Tax ID compulsory for banking, insurance, stock broking, and other financial services. It also extends the requirement to contracts with federal and state governments.

For non-residents, Section 6(1) mandates registration for tax purposes, requiring them to obtain a Tax ID if they supply taxable goods and services or derive income from Nigeria.

To enforce compliance, Section 7(3) empowers tax authorities to assign a Tax ID to individuals or entities who fail to register. The Act also allows for suspension or deregistration of a Tax ID if a business ceases operations temporarily or permanently, provided tax authorities are notified within 30 days.

The legislation is aimed at expanding Nigeria’s tax net and boosting revenue collection. Analysts say the policy could significantly improve tax compliance rates nationwide.

Financial institutions are expected to adjust their systems and processes ahead of the January 2026 rollout.