By Adedapo Adesanya
The chief executive of Dangote Group, Mr Aliko Dangote, says the injection of petrol from his 650,000 barrels per day refinery into the domestic market will help ease Nigeria’s foreign exchange pressure by 40 per cent.
This was one of his soundbites from his recent interview with Bloomberg Television in New York earlier this week.
“We will sell the crude in Naira after we have bought in Naira. So now, we are currently working out with the committee that the exchange rate is going to be priced. It is going to be normal pricing, you know, if crude is at $80, we will pay that price at an agreed exchange rate.
“And then, we will also sell in the domestic market. What that will do is that it’s going to remove 40 per cent pressure on the naira. So because see, the petroleum products consume about 40 per cent of foreign exchange, so you know, and then, you know, it’s like you have 40 per cent of demand been taken out so that can actually stabilize the naira and even if they subsidise, they would know what they are paying for,” the businessman said.
He said that the idea was to leverage an agreement that would serve its business operation and the government.
“The deal is to give the government something that they want. It’s also a win-win situation for all and it would benefit the country.
“Currently, discussions are still ongoing to determine the details of the agreement. They are working out something that I think would be a win-win between us and the NNPC.
“The agreement is very robust. Well, first of all, we would have energy security where they will give us crude. For example, in October, they’re going to give us 12 million barrels, which is on average, about 390,000 barrels a day, which will sell both gasoline, diesel, and aviation fuel,” he explained.
He also revealed the details of the pricing disagreement that occurred with the NNPC Limited.
He said the national oil company bought its current stock from the refinery at a cheaper price than its imported fuel but gave a uniform price for all products.
“There wasn’t really a disagreement, per se. NNPC bought from us on the 15th of September at the international price, which they also bought, about 800,000 metric tons of gasoline imported. So the one that they bought from us actually is cheaper than the one they are importing.
“And so when they announced our price, the guy, I don’t know whether he was authorized. It wasn’t really the real price. What they have announced is most likely that is what it cost them, including profit and other expenses.
“And then the other one is one that they imported. But the people don’t know how much they spend in terms of imports, but their importation is almost, maybe about 15 per cent more expensive than ours, you know.
“So what they are supposed to do is to sell at a basket price, or if they want to remove subsidy, they can announce that they will remove subsidy, which is okay, everybody you know will adjust it.”
Mr Dangote said that discussions are still ongoing and a detailed agreement will be finalised this week on the planned crude oil sales anticipated to begin in October.