Only advantage Nigeria has on Dangote Refinery is zero freight cost—Expert
Contrary to the ongoing insinuations that the commencement of full scale production by the emerging 650,000 bpd Dangote Refinery will rest scarcity and high cost of petroleum products especially fuel, a product marketing consultant, Mr. Saidu Abubakar, has averred that the only advantage is there will be no cost of import freight as production is here in Nigeria.
In an interview on Monday at Apapa Jetty, he brushed aside, all the promises being made by the Minister of State for petroleum, Dr Ibe Kachukwu that Dangote refinery will end fuel crisis in Nigeria.
He said “Whereas we salute the courage of Alhaji Aliko Dangote in building the multibillion dollar facility in Nigeria unlike others who built theirs abroad, I do not think that he will sell to Nigeria at any price less than what obtains at the international market”.
“Prices of petroleum products are driven up and down by global price movement and not local factors only.
“According to www.globalpetrolprices.com, the average price of gasoline around the world is 1.09 U.S. Dollar per liter (average of N310:00). However, there is substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices”.
“One notable exception is the U.S. which is an economically advanced country but has low gas prices. The differences in prices across countries are due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different.
“Why is looks as if Nigerians buy petrol at a regulated price of N145:00 is simply because of subsidy regime which I do not think has any thing to do with Dangote Refinery because it remains a private investment which is free to sell at global price regime from time to time and that is why Dangote himself has made it clear that whereas he sells at global price, any government in power may wish to determine how to sale to citizens.
Abubakar’s position clearly rhymed with the recent comments made by the President of Dangote Group, Alhaji Aliko Dangote, who made it clear that premium motor spirit (PMS) or fuel that will be refined from Dangote Refinery will not be sold at Federal Government’s regulated price. Dangote’s stand therefore rested rumours flying around that his refinery is coming to salvage the official inability of the federal government in fixing the four moribund refineries contrary to 2015 electoral promises by the ruling government.
Aliko Dangote had made his position public on the sidelines of the visit of Central Bank of Nigeria (CBN) Governor, Godwin Emefiele to the refinery in Lagos recently.
Dangote said though the plan is not to concentrate on export entirely, he noted that petroleum products from the refinery will be sold at export rate, noting that “It is the duty of the Federal Government to determine the price of fuel,.
He stressed that “We are not here to concentrate on export but pricing of products depends entirely on the government. If there will be subsidy, which I doubt very much, that is the job of government not the job of Dangote to determine what the price will be.
