Aliko Dangote, Africa's richest individual, announced that the supply of diesel from his Dangote Refinery has caused a roughly 60% decrease in the commodity's price in the local market.
Dangote made this statement during his speech at the Afro-Caribbean Trade & Investment Forum in Nassau, The Bahamas on Wednesday.
The business mogul stated that before the Dangote Refinery began operations, diesel was sold at around N1,700. However, the refinery reduced the price to about N1,000, marking a drop of approximately 60%.
He also noted that despite the exchange rate rising to about N1,500 per dollar, they have managed to keep the price of diesel below N1,200.
"The issue of gasoline is certainly a different issue. That is being dealt with by the government.
"But let me give you an example with the diesel, which is what the industries, transporters and everybody consume, when we first started, it was at N1,700 and the conversion is about N2,000. But immediately when we started we brought down within two weeks the price to N1,000. We have given more than 60% drop in price.
"Even now, with the currency back up to about N1,500, the of diesel is still below N1,200. So there is a big improvement from N1,700 to N1,200. And it's available," Dangote said.
Nigeria's Strategic Petroleum Reserves
Furthermore, Aliko pointed out that currently, Nigeria does not have a strategic reserve for petroleum products, a trend the businessman considers dangerous for a country of over 200 million people.
For Dangote, however, the $20 billion refinery could serve as the strategic reserve for the country.
He said the refinery has a tankage capacity of more than 4.78 billion liters of petroleum products, with an additional 600 million capacity to be added in the nearest future.
"By the way, Nigeria doesn't have a strategic reserve in terms of petroleum products which is very dangerous. But in our own plant now, we earlier had about 4.78 billion liters of various tankage capacity.
"But right now, we are adding about another 600 million. So effectively as we go forward, the refinery will be the strategic reserve of the country in terms of petroleum products," Dangote said.
What you should know
The Dangote refinery which commenced operations in March supplied diesel and aviation jet fuel in April, and it is expected to begin the supply of premium motor spirit (PMS) next month.
The refinery initially sold to local marketers at the rate of N1,200 per litre.
However, the company later announced the reduction in the prices of both diesel and aviation fuel to N940 and N980 per litre, respectively.
The refinery also began exporting jet fuel to Europe, as per data from S&P Global Commodities at Sea.
To date, Dangote has exported six cargoes of jet fuel/kerosene, all of which were delivered to Senegal, Togo, or Ghana.
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