By David Akinmola
President of Dangote Industries Limited, Aliko Dangote, has attributed the high price of petrol in Nigeria partly to the continued smuggling of the product to neighbouring countries, where it sells at significantly higher prices.
Dangote said the price disparity across Nigeria’s borders was creating a strong financial incentive for traders to divert petrol meant for the domestic market, thereby putting pressure on local availability and prices.
He made the disclosure in an interview with Arise Television, arguing that the cost of petrol in Nigeria should be considered against prices in neighbouring countries rather than in isolation.
According to him, petrol prices in some neighbouring countries are between 30 and 50 per cent higher than in Nigeria, making cross-border movement of the product attractive to smugglers.
Dangote specifically cited Niger Republic, where he said petrol could sell for about 20 to 25 per cent more than the Nigerian price.
He said the price gap effectively creates an immediate arbitrage opportunity for traders who purchase petrol in Nigeria and move it across the border for resale.
The development is significant for Nigeria’s downstream petroleum market because petrol diverted across the borders reduces the volume available to domestic consumers, potentially adding pressure to supply and retail prices.
Dangote also alleged that some products intended for Nigerian markets were being diverted to border communities for onward movement into neighbouring countries.
The comments come despite the increased availability of locally refined petrol following the commencement of large-scale production at the Dangote Petroleum Refinery, which has significantly reduced Nigeria’s dependence on imported petrol. Reuters reported that the refinery has also become a major exporter of refined products amid tight global fuel markets.
However, Dangote noted that local refining does not completely insulate Nigeria from international market conditions, as the refinery purchases crude at prevailing international prices and operates within a globally linked petroleum market.
The issue of petrol pricing has become particularly important following the removal of fuel subsidies, which shifted the downstream market towards market-based pricing and exposed consumers to changes in crude oil prices, exchange rates, logistics and supply conditions.
The smuggling concern also raises questions about the effectiveness of border controls and the need to ensure that petroleum products supplied to the domestic market actually reach Nigerian consumers.
For consumers and businesses, the persistence of high petrol prices continues to have wider economic implications, with transportation, logistics, power generation and the cost of goods and services all affected by changes in fuel prices.
Dangote’s position therefore places renewed emphasis on the need to address cross-border fuel diversion while ensuring that increased domestic refining capacity translates into reliable supply and more competitive pricing for Nigerian consumers.
Meanwhile, the refinery is seeking to expand its capacity significantly. The company plans to increase refining capacity to about 1.4 million barrels per day by 2029, alongside investments aimed at expanding its product range and export capacity.
The challenge for Nigeria’s downstream sector is now to ensure that the benefits of expanded domestic refining are retained within the economy, rather than allowing price differentials with neighbouring countries to encourage the movement of locally supplied petrol across the borders.
