The Dangote Group has denied a claim by the Depot and Petroleum Product Marketers Association of Nigeria that the refinery sells petrol to international traders at a price of N65, which is cheaper than the cost in Nigeria.

DAPPMAN Executive Secretary, Olufemi Adewole, told our correspondent in an interview that members of the group bought Dangote’s petrol from international traders in Lome, Togo, at prices lower than what was offered locally by the refinery.

Adewole said importers had made efforts to buy petrol from the Dangote refinery, but the price was higher, adding that sometimes, it could be better to import the product.

“Dangote sells to international traders at N65 cheaper than what he is selling to us. In some instances, we were able to buy from those people and still bring it to Nigeria,” Adewole said.

But in a statement released on Monday, the management of the Dangote Group described the claims as misleading.

The refinery wondered why the pump price of petrol is N865 in Nigeria, while it is double that price in Togo.

“It is incorrect to claim that the price of petrol in Togo is lower than in Nigeria. A straightforward check reveals that the average pump price in Lomé stands at approximately 680 CFA francs per litre, equivalent to N1,826.

“This figure reflects the very scenario that DAPPMAN and its affiliates appear to advocate for in Nigeria,” the statement read partly.

The Dangote refinery stated that it has positioned Nigeria as a primary source of affordable petrol feedstock for West Africa, despite importing over 60 per cent of the crude oil it processes.

The group alleged that DAPPMAN and its members focused on importing a product that was produced in Nigeria and engaging in round-tripping.

“It is increasingly evident that DAPPMAN and some of its members are disproportionately focused on the importation of refined products, even admitting to round-tripping, whereby petrol produced by the Dangote refinery is re-imported from Togo into Nigeria at a markup.

“Another hole in their narrative of being the major supplier of petrol in the country. What, then, is the business rationale behind this practice, especially when considering the substantial additional cost of transporting petroleum products from Lomé to Lagos, costs that run into billions of Naira?

“If their true intention is to serve the Nigerian domestic market, why not join the growing list of local partners of the Dangote refinery? These partners, in addition to receiving high-quality products, benefit from volume-based discounts, credit facilities and logistics support, all designed to enhance local availability and affordability of petroleum products for the Nigerian people, at a recommended rate by all parties,” the statement said.

Dangote explained that there is a difference between the pricing at the Single Point Mooring and the gantry, saying, “While smuggling products through the SPM is relatively easier, transporting them via land borders is far riskier and more complex.”

The reality, It said, is that for some operators, the business has never truly been about delivering petroleum products to Nigerian consumers; “instead, it revolves around arbitrage opportunities, where they can easily triple the value of the products by diverting them to more lucrative markets in the sub-region.” (The PUNCH)

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