Dangote Refinery Defends Pricing Strategy Amid Controversy
In a strongly-worded press statement, Dangote Refinery has countered allegations of overpricing its petroleum products, accusing rival importers of peddling misinformation.
The refinery, owned by Africa’s richest man Aliko Dangote, claims its prices are benchmarked against international rates and are competitive. It argues that cheaper imports touted by IPMAN and PETROAN likely involve substandard products, posing health and environmental risks.
Dangote Refinery also highlighted regulatory gaps, citing the lack of laboratory facilities at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to detect substandard imports.
The statement comes amid intensifying debate over Nigeria’s deregulation policy and its impact on the oil industry. Critics argue that Dangote Refinery’s pricing strategy undermines competition and fuels inflation.
However, Dangote Refinery maintains that its pricing is fair and necessary to protect domestic refining and job creation. The company points to global precedents, such as US and European tariffs on electric vehicles and microchips, to justify its stance.
Industry analysts say the controversy reflects deeper structural issues in Nigeria’s oil sector, including inadequate regulation and infrastructure deficits.
As the debate rages on, Nigerians are left wondering whether Dangote Refinery’s pricing strategy truly serves the national interest or prioritizes corporate profits.
PRESS STATEMENT
We had lately refrained from engaging in media fights, but we are constrained to respond to the recent misinformation being circulated by IPMAN, PETROAN, and other associations.
Both organisations claim that they can import PMS at lower prices than what is being sold by the Dangote Refinery. We benchmark our prices against international prices, and we believe our prices are competitive relative to the price of imports. If anyone claims they can land PMS at a price cheaper than what we are selling, then they are importing substandard products and conniving with international traders to dump low quality products into the country, without concern for the health of Nigerians or the longevity of their vehicles. Unfortunately, the regulator (NMDPRA) does not even have laboratory facilities which can be used to detect substandard products when imported into the country.
Post deregulation, NNPC set the pace by selling PMS to domestic marketers at N971 per litre for sale into ships and at N990 for sale into trucks. This set the benchmark for our pricing, and we have even gone lower to sell at N960 per litre for sale into ships while maintaining N990 per litre for sale into trucks.
In good faith, and in the interest of the country, we commenced sales at these prices without clarity on the exchange rate that we will use to pay for the crude purchased.
At the same time, an international trading company has recently hired a depot facility next to the Dangote Refinery, with the objective of using it to blend substandard products that will be dumped into the market to compete with Dangote Refinery’s higher quality production.
This is detrimental to the growth of domestic refining in Nigeria. We should point out that it is not unusual for countries to protect their domestic industries in order to provide jobs and grow the economy. For example, the US and Europe have had to impose high tariffs on EVs and microchips in order to protect their domestic industries.
While we continue with our determination to provide affordable, good quality, domestically refined petroleum product in Nigeria, we call on the public to disregard the deliberate disinformation being circulated by agents of people who prefer for us to continue to export jobs and import poverty.
Anthony Chiejina
Group Chief Branding and Communications Officer
3rd November, 2024
https://x.com/DangoteGroup/status/1853155571823759452?t=RStsFyYDIIvi1t3KMR7vJg&s=19
