This, according to him, will enable the refinery to have a
storage capacity of 5.3 billion litres.
The Dangote Petrochemical Refinery refinery currently has
4.78 billion litres of storage capacity for refined petroleum products.
Dangote spoke at the Afreximbank Annual Meetings and
AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas on Wednesday.
The billionaire alleged that international oil companies
refused to sell crude oil to his refinery because they did not want him to
succeed.
Asked to speak on whether or not his refinery would crash
the pump price of petrol, which currently sells at around N700 per litre,
Dangote gave no affirmative answer, but he quickly recounted how the price of
diesel fell from 1,700 to N1,200 when his diesel flooded the market.
“The issue of gasoline is certainly a different issue. That
one is being dealt with by the government. But let me give you an example. In
the diesel, which the industries, transporters and everybody consume; when we
first started, it was N1,700, and the dollar conversion was about N1,200 then.
Immediately when we started, within two weeks we brought down the price to
N1,000. We took it from N1,700 to N1,200 and from N1,200 to N1,700, we have
given more than 60 per cent drop in price.
“With the currency now back up to about N1,500 per dollar,
the price is still below N1,200. That’s a big improvement, from N1,700 to
N1,200. And the diesel is available, we are not living from hand to mouth
anymore,” Dangote replied when asked about a possible petrol price cut.
The business mogul said the refinery would be a strategic
reserve for refined products.
“The country doesn’t have strategic reserves in terms of
petrol, which is very dangerous. But in our plant now, when you came, we had
only 4.78 billion litres of various tankage capacity. But right now we’re
adding another 600 million.
“So effectively, as we go forward, the refinery will be the
strategic reserve of the country in terms of petroleum products,” he noted.
The Africa’s richest man explained that international oil
companies denied him access to their crude because they did not think he could
succeed with the 650,000 barrels per day capacity refinery.
“In a system where, for 35 years, people are used to
counting good money, and all of a sudden, they see that the days of counting
that money have come to an end, you don’t expect them to pray for you. Of
course, you expect them to fight back.
“And I think that is the process that we’re now really going
through. But the truth is that, yes, the country, the sub-region, and also the
continent, of sub-Saharan Africa, need this refinery. So, you expect them to
fight through non-supply of crude, non-purchase of the product, but I think
it’s all temporary. We’ll get there,” he added.
Dangote has been importing crude oil from the United States
to get feedstock for the refinery.
The Kano-born businessman added further that Nigeria has for
years been importing dirty fuel into the country.
Dangote asked the Federal Government to enforce regulations
stopping the importation of dirty fuels.
According to him, dirty fuels have been responsible for many
cases of cancer in Nigeria and Africa.
Speaking of imported fuel, he said, “It is high sulfur, very
polluting and also when you look at it, especially in Nigeria, in the past few
years, we’ve been having cases of cancer, and most of these cases of cancer
have to do with the bad fuel that we’ve been using. So, I will advise even
here, you should check the quality of what is being dumped in your region in
The Caribbean.”
He spoke further that Nigerian crude oil attracts the most
premium, yet the nation imports the dirtiest fuels.
Asked if there is no regulation to check the quality of
imported fuel, Dangote reported, “Now there is regulation, so it is upon the
regulators to enforce the regulation.”
Despite its huge crude oil reserves, Nigeria still depends
heavily on imported refined fuel.
But Dangote recently said Nigeria would no longer import any
fuel by the time he begins the sale of PMS in the next few weeks.
When fully operational, Dangote disclosed that the refinery
would supply cheaper fuel to the Caribbean, saying the price of fuel in that
area is expensive.
He planned to set up a terminal in the region to give them
access to cheaper energy.
“I don’t know the exact price but I know that the price in
the Caribbean in terms of petroleum products is very high. So, we produce it
cheaply, we can always bring it here, we can set up a terminal and we will be
able to feed their needs.
“We have a bilateral agreement with them and bringing in
stuff from there is not more than 18, 20 days maximum. Once we set up a
terminal, they will have very cheap oil. They will have cheap energy. By having
cheap energy, their economies will grow faster,” he maintained.
Dangote recalled that he was once persuaded by a former
Minister of Energy in Saudi Arabia, Khalid Al-Falih, to shelve the idea of
building a refinery. However, he said he told the former minister that he did
not need his advice.
“Four years ago, I was in Saudi Arabia during the fasting
period and I was invited for the breaking of the fast, Dr Falih, who used to be
the Minister of Energy invited me to come and break the fast with him and I
went there. He just said, ‘Aliko, I heard that you’re planning on building a
refinery, what capacity?’ I said 650,000. He kept quiet for a while and said,
‘You know just about 120km from Mecca, we are building one and I think I would
like you to go and have a look. We as Saudi Aramco, are facing a lot of
challenges and, we are proceeding with it, but my advice to you is not to do it
because normally, refineries are built by major oil corporations or sovereign
countries.’
“I said, ‘But Your Excellency, unfortunately, we have
already started, so I’m not looking for am advice.’ That was really how we
continued,” he recounted.
Dangote revealed that both local and international cartels,
which he described as “mafia”, made repeated attempts to sabotage the $19bn
refinery project located in Lagos.
“Well, I knew that there would be a fight. But I didn’t know
that the mafia in oil, they are stronger than the mafia in drugs. I can tell
you that. Yes, it’s a fact,” he said.
Dangote, who described himself as a fighter, said they tried
all sorts to stop him.
“As a matter of fact during the COVID period, some of the
international banks were looking forward to making sure that they push us into
default of our loans so that the project will just be dead. And that didn’t
happen with the help of banks like Afreximbank,” it was stated.
He explained that he had paid off $2.4bn of the $5.5bn loan
for his $19bn Lagos-based refinery.
“We borrowed the money based on our balance sheet. I think
we borrowed just over $5.5bn. But we paid also a lot of interest as we went
along, because the project was delayed because of a lack of land, also the
sand-filling took a long time. Almost five years or so we didn’t do anything.
“We started in 2018. We borrowed that much. We have, of
course, paid interest and some principal, about $2.4bn. We’ve done very well.
We now have only about $2.7bn left to be paid. So we’ve done very well for a
project of that magnitude,” he said.
Dangote generates 1,500MW
Talking about industries being energy independent, Dangote
posited the refinery and his other companies are not putting any pressure on
the grid, though he suggested that power production should be the business for
other people.
“We don’t put pressure on the grid. Like us now, we produce
about 1,500 megawatts of power for self-consumption. But if this thing is
beneficial and it makes sense, there will be people who will concentrate on
actually generating the power so it won’t be part of your cost. There are a lot
of people that are doing industrial parks, and I think Afrexim Bank is involved
in these parks in terms of funding; that will help. It means that once you
come, you are just going to plug and play,” he added.
Recalls that operators of modular refineries stated on
Sunday that the pump price of Premium Motor Spirit, popularly called petrol,
should drop to about N300/litre upon the commencement of massive production by
the Dangote Petroleum Refinery and other indigenous producers.
Speaking under the aegis of the Crude Oil Refinery Owners
Association of Nigeria, they explained that what happened to the cost of diesel
after Dangote started producing it, would happen to petrol prices once it is
being produced massively in Nigeria.
“A lot of companies today benefit from the importation of
petroleum products at the expense of Nigerians,” the Publicity Secretary of
CORAN, Eche Idoko, stated.
He told our correspondent that “if we begin to produce PMS
today in large volumes, provided there is adequate crude oil supply, I can
assure that we should be able to buy PMS at N300/litre as the pump price.
“Why make Nigerians buy it at almost N700/litre when you
know that if you allow refineries to work the price will come down? Is it
because you want to satisfy the global refiners abroad that are making so much
from us?”
When told that there are arguments that it is not possible
to have such a drop in price because crude oil, the raw material for PMS, is
priced in dollars, the CORAN official insisted that the petrol price would
crash once it is being produced massively by indigenous refiners.
He said, “We were selling diesel for N1,700 to N1,800/litre,
but as soon as Dangote refinery started production he brought down the price to
N1,200/litre. What other proofs do you need? As I speak to you now there is
every tendency that before December diesel prices will drop further. The only
reason why diesel is not doing below N1,000/litre is because of our exchange
rate.
“If the exchange rate drops, diesel will drop below the
N1,000/litre price. Now the exchange rate concern is because Dangote imports
crude. If he is not importing, the exchange rate may not have so much effect,
though he is still buying crude in dollars (in Nigeria) anyway.”
But oil marketers have repeatedly maintained that even if
there would be a reduction in the pump price of petrol, it would be marginal.
On May 18, 2024, The PUNCH reported that Africa’s richest
man, Aliko Dangote, stated that following the laid-down plans of the Dangote
refinery, Nigeria would no longer need to import petrol starting June this
year.
Dangote had also stated that his refinery could meet West
Africa’s petrol and diesel needs, as well as the continent’s aviation fuel
demand. He spoke at the Africa CEO Forum Annual Summit in Kigali, expressing
optimism about transforming Africa’s energy landscape.
“Right now, Nigeria has no cause to import anything apart
from gasoline (petrol) and by sometime in June, within the next four or five
weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a
litre,” the billionaire had declared.
Meanwhile, Dangote said his plan to release premium motor
spirit into the market this month will no longer be possible. Dangote said this
was due to some minor challenges, stating that the product would be out by July
10 to 15.
“We had a bit of delay, but PMS will start coming out by 10
to 15 of July. But then we want to keep it in the tank to make sure that it
settles. So by the third week of July, we’ll be able to come out to take it
into the market,” Dangote had said.