Aliko Dangote, President of the Dangote Group, has announced plans to expand the storage capacity of his refinery by 600 million litres, bringing the total capacity to 5.3 billion litres. The Dangote Petrochemical Refinery currently has a storage capacity of 4.78 billion litres for refined petroleum products. Dangote made this announcement at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.
During his speech, Dangote also alleged that international oil companies refused to sell crude oil to his refinery because they did not want him to succeed. When asked about the potential impact of his refinery on petrol prices, Dangote did not give a definitive answer but pointed to the drop in diesel prices from N1,700 to N1,200 when his diesel entered the market.
Asked to speak on whether or not his refinery would crash the pump price of petrol, which currently sells at around N700 per litre, Dangote gave no affirmative answer, but he quickly recounted how the price of diesel fell from 1,700 to N1,200 when his diesel flooded the market.
“The issue of gasoline is certainly a different issue. That one is being dealt with by the government. But let me give you an example. In the diesel, which the industries, transporters and everybody consume; when we first started, it was N1,700, and the dollar conversion was about N1,200 then. Immediately when we started, within two weeks we brought down the price to N1,000. We took it from N1,700 to N1,200 and from N1,200 to N1,700, we have given more than 60 per cent drop in price.
“With the currency now back up to about N1,500 per dollar, the price is still below N1,200. That’s a big improvement, from N1,700 to N1,200. And the diesel is available, we are not living from hand to mouth anymore,” Dangote replied when asked about a possible petrol price cut.
The business mogul said the refinery would be a strategic reserve for refined products.
“The country doesn’t have strategic reserves in terms of petrol, which is very dangerous. But in our plant now, when you came, we had only 4.78 billion litres of various tankage capacity. But right now we’re adding another 600 million.
“So effectively, as we go forward, the refinery will be the strategic reserve of the country in terms of petroleum products,” he noted.
The Africa’s richest man explained that international oil companies denied him access to their crude because they did not think he could succeed with the 650,000 barrels per day capacity refinery.
“In a system where, for 35 years, people are used to counting good money, and all of a sudden, they see that the days of counting that money have come to an end, you don’t expect them to pray for you. Of course, you expect them to fight back.
“And I think that is the process that we’re now really going through. But the truth is that, yes, the country, the sub-region, and also the continent, of sub-Saharan Africa, need this refinery. So, you expect them to fight through non-supply of crude, non-purchase of the product, but I think it’s all temporary. We’ll get there,” he added.
Dangote has been importing crude oil from the United States to get feedstock for the refinery.
