President of Dangote Industries Limited, Aliko Dangote, has attributed the relatively high cost of petrol in Nigeria partly to continued smuggling of the product into neighbouring countries where it commands higher prices.
Dangote said the significant price difference between Nigeria and neighbouring countries creates a strong incentive for traders to move petrol across the borders for resale, rather than keep the commodity within the domestic market.
He made the remarks during an interview with Arise TV on Tuesday, while discussing petrol prices, domestic supply and the possible impact of the ongoing crisis in the Middle East on petroleum markets.
According to the businessman, petrol prices in some neighbouring countries are between 30 and 50 percent higher than in Nigeria, making cross-border diversion potentially lucrative.
“Expensive is relative. In the sense that today, maybe, you know, a lot of them, there’s ignorance also. What they need to do is ask, what is the neighbour’s price?” Dangote said.
He said the price disparity remains one of the factors encouraging the movement of petrol into neighbouring markets from Nigeria.
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“I don’t know if you know that there’s still a lot of smuggling of the same petrol we are producing to our neighbouring countries,” he said.
Dangote specifically cited Niger, where he said petrol could sell for between 20 and 25 percent more than in Nigeria.
Using a domestic price of N1,350 as an example, he said the price difference across the border could provide traders with an immediate incentive to divert the product.
“Because those neighbouring countries are about 30 to 50 percent more expensive than Nigeria. So, it’s not actually like for like,” he said.
He questioned whether many legitimate businesses could generate a similar immediate return. “So, what business are you going to do that will make you have an instant 25 per cent return?” he asked.
Dangote also described how petrol intended for domestic distribution could allegedly be diverted towards border communities for sale to buyers in neighbouring countries.
He said traders could claim that products were being transported to locations such as Sokoto before diverting them towards Ilela, a major border area, where they could be sold at higher prices.
The businessman argued that such activity could reduce the quantity of petrol available to Nigerian consumers while creating additional pressure within the domestic market.
Beyond the issue of pricing, Dangote warned that the continuing crisis in the Middle East could create a more serious challenge for the petroleum market.
According to him, the immediate concern may eventually shift from the price of petrol to the availability of sufficient volumes.
“And the problem now, going forward, I must also warn that this crisis in the Middle East is not even about price; it’s about availability,” he said.
His comments come amid concerns about the potential impact of instability in the Middle East on global energy markets and the supply of petroleum products.
However, Dangote assured Nigerians that his refinery was prepared to continue supplying the domestic market.
“We will deliver to Nigeria. Nigerians don’t need to worry. There will not be any shortage from our own part,” he said, adding that the refinery would continue supplying the market despite external challenges.
“There won’t be any shortage. There will not be any queues. We will make sure that we keep satisfying the market, despite all odds,” Dangote said.
