Dangote explains why free petrol distribution has not lowered pump prices

Devakumar Edwin, Vice-President of the Dangote Group, has explained why the free petrol distribution initiative by Dangote Petroleum Refinery has not yet reduced fuel prices across the country.

On Monday, the Nigerian National Petroleum Company (NNPC) Limited raised the pump price of petrol to ₦992 per litre in Lagos and ₦955 per litre in Abuja.

Speaking on Friday during a tour of the refinery by Reno Omokri, a former aide to ex-President Goodluck Jonathan, Edwin said the delay in the arrival of 4,000 compressed natural gas (CNG) trucks ordered from China has slowed down the refinery’s nationwide delivery of premium motor spirit (PMS), also known as petrol.

“What happened is we ordered the 4,000 trucks but the ships from China coming, they could not get adequate ships to bring all the 4,000 here. That had a major impact,” Edwin said.

“By the grace of God, before the end of this year, we will have all the trucks here. Once we have all the trucks here, we start rolling out. Every demand locally, we will be able to meet through our own trucks. Then, we will be able to see the impact — whether you are in Taraba, Maiduguri, or Sokoto — we will be able to see that the prices remain uniform and the prices are much lower.”

Edwin also revealed that the refinery is facing challenges in sourcing enough local crude oil to meet its production needs, delaying its goal of achieving 100 percent local crude supply.

In July, Edwin had announced that the refinery aimed to transition fully to local crude supply by the end of 2025. However, he said this plan has been hampered by the suspension of the naira-for-crude initiative, which resulted from limited crude supply from the NNPC.

On September 27, the refinery briefly suspended the sale of petrol in naira but resumed operations after the federal government’s intervention.

Edwin said President Bola Tinubu’s directive for crude to be sold in naira has revived optimism that the refinery’s crude supply issues will soon be resolved.

He added that the refinery is also facing difficulties with international oil companies (IOCs), which often inflate prices by forcing local buyers to negotiate through their offshore trading firms.

“But I do believe that these things will get eased out going forward. We expect that it will get eased out,” he said.

“As I said, the President has clearly announced Nigeria first. So, the President will definitely push forward for 100 percent of the petroleum products to be refined within the country. And people will come and invest. So, things will definitely change.”

Edwin noted that Nigeria can produce crude oil of the same quality as imported crude and recalled that the United States was once Nigeria’s largest crude oil buyer.

He said the refinery’s daily crude oil requirement of 600,000 barrels is achievable, given that Nigeria currently produces about 1.5 million barrels per day, though the company continues to face supply bottlenecks.

Edwin added that President Tinubu’s intervention has “held out” hope for resolving these challenges.