Dangote: Why local refining hasn’t cut petrol prices

Nkereuwem Effiong

Aliko Dangote, President of Dangote Group, has explained why petrol prices remain high in Nigeria despite the commencement of large-scale domestic refining, saying local production cannot completely shield consumers from fluctuations in global crude oil prices.

Dangote said his refinery buys crude at prevailing international market prices and, at times, pays substantial premiums for supplies. As a result, he said, the refinery could not sell petrol below sustainable market levels simply because it was produced locally.

Speaking in an interview with Arise TV, Dangote also pointed to the price disparity between Nigeria and neighbouring countries as a factor driving the continued smuggling of petrol out of the country.

“There is still a lot of smuggling of the same petrol we are producing to our neighbouring countries because those neighbouring countries are about 30 per cent to 50 per cent more expensive than Nigeria,” he said.

Dangote disclosed that the refinery had bought crude at as much as $124 per barrel in May, stressing that the company could not absorb the difference by subsidising petrol indefinitely.

“We can’t go now and subsidise everything,” he said.

He nevertheless assured Nigerians that the refinery would continue to supply the domestic market, saying there would be no shortage or fuel queues from its operations.

“Nigerians don’t need to worry. There will not be any shortage from our own part. There will be no queues, and we’ll make sure we keep satisfying the market despite all odds,” he said.

High interest rates threaten industrialisation

Dangote identified high borrowing costs as one of the biggest obstacles to industrialisation in Nigeria, arguing that businesses cannot sustainably finance large-scale investments when interest rates are around 30 per cent.

“It is very difficult to industrialise with interest rates at 30 per cent. I can’t see the magician who can actually industrialise a country with 30 per cent interest cost,” he said.

He also warned that inconsistent government policies, inadequate electricity and what he described as insufficient protection for domestic investments could discourage further investment in the refining sector.

“Under the current things that are going on, especially downstream, I cannot see any new refinery in our lifetime,” Dangote said.

He urged the government to protect productive domestic industries, arguing that supporting local businesses would help create jobs, generate tax revenue and expand economic activity.

“If you import, what you are doing is importing poverty and exporting jobs that you are supposed to create out of the country,” he said.

On manufacturing, Dangote said unreliable electricity remained a major constraint, adding, “You cannot manufacture goods with diesel.”

‘I’ve lived in my home for 36 years’

Away from business, Dangote said he had lived in his current home for 36 years and had no plans to move.

“You know how long I’ve been here? Thirty-six years. I don’t plan on leaving. I’m very comfortable here,” he said.

He said he was generally content with his lifestyle and did not feel compelled to pursue new luxuries.

“Once I come in in the evening, it’s difficult to take me out of my house,” he added.

The billionaire also criticised the spending habits of some wealthy Africans who, he said, acquired private aircraft without investing in productive ventures such as factories.

“What I see is people now owning aircraft all over the place, flying all over, and they don’t have one single factory,” he said.

He argued that wealth should be deployed to expand productive capacity and create economic opportunities, saying his own priority was to contribute to the industrialisation of Africa.

Dangote added that foreign investors were increasingly interested in Africa but needed large-scale investment opportunities capable of attracting substantial capital.

“Foreigners are very interested now; they want to invest in Africa, but they don’t have big-ticket items,” he said.

Dangote: Male heir not my priority

On succession, Dangote said having a male heir to inherit his business empire was not a priority, stressing that any of his three daughters could eventually lead the Dangote Group.

Asked whether he could see one of his daughters taking charge of the conglomerate, he said he believed at least one of them had the capacity to lead.

“I think, yes, I can see one of them. I’ve been watching all of them, so I can see one of the three that can actually lead,” he said.

His daughters, Halima, Fatima and Mariya, hold senior positions within the business group, with their involvement in the family enterprise expanding as part of its broader succession arrangements.

Dangote said their participation was driven by personal interest rather than pressure from him.

“They are very, very interested in the business. I’m not forcing them to come and be part of this business. No. They are very interested, and they enjoy it,” he said.

He said he believed his daughters could eventually surpass his achievements and take the company to a higher level.

“One of them can be better than, I never expected to perform this much. But I’m sure they’re highly educated, so they will be more creative. So most likely, they might be even taking the company to the next level,” he said.

Asked whether all three could achieve this, Dangote replied, “All of them.”

On whether he still hoped to have a son, particularly given traditional expectations surrounding male heirs in Kano, Dangote said it was not important to him.

“Sometimes you can pray for God to give you a son, but that son might be the one to bring down the name of the family,” he said.

Dangote said having a male child did not automatically guarantee the preservation of a family legacy.

“Sometimes when God doesn’t give you something, don’t push. I don’t think a son would have done something better than these three daughters that I have. That one, I think, you know, it’s not my priority,” he said.

‘I want the company run professionally’

Dangote said his succession plan went beyond deciding which family member would eventually take control of the conglomerate. His priority, he said, was to establish strong professional management and corporate governance capable of protecting the business beyond his lifetime.

“I want this company to be run professionally. I want to have the highest level of governance,” he said.

He cited global companies such as Microsoft and Apple as examples of businesses that had continued to operate and grow beyond their founders.

“We want to make sure that we make it very difficult for any family member to come and destroy anything,” he said.

Dangote said his ultimate legacy was to help industrialise Africa, adding that he expected other African entrepreneurs to join the effort.

“What I want to leave as a legacy is to industrialise Africa. I cannot do it alone, but I’m 100 per cent sure that in the next two or three years, other Africans will join,” he said.