Dangote Refinery Rejects Allegations of Offering Cheaper Petrol to Foreign Buyers

According to the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), the Dangote Group has denied claims that its refinery sells gasoline to foreign buyers at lower prices than to Nigerian retailers.
Olufemi Adewole, the Executive Secretary of DAPPMAN, claimed in an interview with Punch that the association’s members were able to purchase Dangote gasoline from foreign dealers in Lomé, Togo, for ₦65 less than what the refinery sells locally.

“Dangote is selling to foreign traders for ₦65 less than he is selling to us.” Adewole asserted, “In certain cases, we were able to purchase from those individuals and still deliver it to Nigeria.”

In response, the Dangote Group called the charges “misleading and inaccurate” in a statement released on Monday.

The corporation asked why oil prices in Togo are more than twice as high as those in Nigeria, where they are ₦865 per liter.

To say that petrol costs less in Togo than in Nigeria is untrue. “A simple check shows that the average pump price in Lomé is about 680 CFA francs per litre, which is ₦1,826,” the statement said.

The corporation emphasized that, even though it imports more than 60% of the crude oil it processes, its refinery has established Nigeria as the main supplier of reasonably priced gasoline feedstock for West Africa.

Dangote also charged several marketers with round-tripping, which involves purchasing gasoline in Nigeria, carrying it via Togo, and then reimporting it at exorbitant costs.

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“DAPPMAN and some of its members are disproportionately focused on importing refined products, and they have even admitted to round-tripping,” it is becoming more and more clear. The corporation questioned, “What is the business rationale behind this practice, especially given the significant additional cost of transporting petroleum products from Lomé to Lagos?”

The refinery maintained that marketers that are dedicated to Nigeria’s home market ought to collaborate with it directly, pointing out that local partners already benefit from volume-based discounts, credit facilities, and logistics assistance.

Why not become one of the Dangote refinery’s expanding list of local partners if their real goal is to service the Nigerian home market? In addition to getting top-notch products, these partners also gain from incentives meant to improve local availability at a suggested price that has been decided upon by all parties, the statement continued.

Dangote further explained that price variations can occur based on whether marketers gantry-lift or hoist products from the Single Point Mooring (SPM) facility. It cautioned that for many operators, serving local customers has never been the main focus of the Nigerian petroleum industry.

In actuality, some businesses have never really focused on providing petroleum products to Nigerian customers. Rather, it centers on options for arbitrage, where they can simply triple the value of goods by rerouting them to more profitable markets inside the subregion,” the statement stated.