A few months ago, when Dangote Refinery came out with the news that it was ready to begin to offer its petrol to Nigerians, shouts of; praise the Lord; finally! became the testimony in every mouth. Would Dangote now resort to petrol export?
You cannot blame Nigerians for expressing excitement and being religious. They have been bruised on all sides.
In fact, majority of them had seen ‘shage’, with many shouting: ‘T-Pain’, making their situation even most excruciating with their words. But that is a discussion for another day.
It was a relief, to hear that petrol from a refinery in Nigeria will get to Nigerians, but many were not aware of the troubles ahead of them.
Quite a good number of persons had expected that the petrol from Dangote Refinery would come at a cheaper rate. But that is not the case.
There are too many costs attached to the petrol before it gets to your car tank and those have pushed the price even higher. The CEO of Dangote Refinery, Aliko Dangote, himself, is even expressed surprised at all of the cost attachments.
This was why the refinery issued a statement to say that the price the NNPC had announced to Nigerian’s was not what it should have been. In fact, the company said it was mischievous.
While that is true, Dangote has refused to tell Nigerians what the price should be. At every interview occasion, he would say the NNPC was in the right position to tell Nigerians the price of petrol.
Please, Come For Petrol
On the table of the NNPC is the increasing urge to top the price of petrol to accommodate more cost and returns allocation, but that situation has created a level of uncertainly in the petroleum industry, forcing some marketers to stay away from Dangote petrol. This has reduced the amount of petrol that has come from the refinery.
A few days ago, Dangote himself demanded that the marketers and the NNPC should come and lift petrol, signalling that there is an underground politics being played with the collection and distribution of petrol to Nigerians.
In an interview, Dangote said he was incurring cost holding petrol in tanks and waiting for marketers and the NNPC to come and lift it.
According to him, the tanks are full, and the company could meet daily needs of Nigerians and beyond.
“We are producers. I have a refinery. I’m not in the business of retail.
“If I’m in the business of retail, then you can hold me responsible.
“But what I’m saying is that the retailers should please come forward and pick.
“If they don’t come forward and pick, what do you want me to do? There is nothing I can do.
‘It’s Costing Me Money’ – Dangote
“I’m expecting either NNPC or the marketers to stop importing and they should come and collect. We have what they need.
“As they remove, I will be pumping. I don’t know whether you understand what it takes to keep having millions of litres inside our tank. It’s costing me money.
“Every day, if I’ll be able to collect the naira, I can actually charge somebody 32% in interest.
“Right now, that is what I’m losing. And you’re talking about 500 billion. We don’t print money.
“The issue is that if they come to collect, you’ll not see any queues in the filling stations,” Dangote said.
Dangote Petrol Export
This statement contains some things that Nigerians are not seeing – the export of petrol by Dangote.
No one goes into a business without first counting the cost. Dangote is a known businessman, one with a great strategy.
Dangote refinery is one of the biggest in Africa and at a better chance of making more money when it exports petrol to other nations.
Tanks Are Full With Petrol
From the experience with Nigeria’s moribund refineries, one can tell that the more a refinery is not used for refining, it begins to lose value.
Dangote said that the products are already bringing additional cost to his company. This cost will be added to the cost of the petrol, from his indication.
So, the more marketers delay in lifting petrol, the more expensive it could become. Will Nigerians be able to bear that cost or will Dangote throw away that cost as bad debt?
Dangote will not want to get to that point where he would need to make more investment in sustaining the refinery – may be making new tanks to accommodate new refined products.
The tanks are full.
Recouping investment is his target and the earlier he begins to make in-roads the better.
Endless Naira-For-Crude Talks
So, Dangote Refinery would resort to exporting what it has in its tanks to stop rising cost of keeping it and open it up for more. This he may adopt, as those in power still play politics with pricing and ‘profit’.
A few months ago, President Tinubu approved that Dangote should get crude in Naira, but till now, that has not been fully implemented.
Just some days ago, talks began between Dangote and the government on this same crude in Naira.
Avoiding Lose Of Capital
As a result, it appears that only when Dangote is able to get crude in Naira that the price of petrol would come down.
Also, marketers are aware that if they go out to buy Dangote petrol at the current price and fail to sell out before the batch produced from crude bought with naira is out, they stand a chance of losing money.
All of these variables are pointers to the possibility of Dangote resorting to petrol export. Aliko Dangote may not wait issues are resolved to sell to Nigerians while his refinery walks the road to moribund. Also, he is incurring cost.
There appears to be a long walk for Nigerians in this situation of rising cost of living triggered by ‘subsidy is gone‘.