Aliko Dangote, chief executive officer of Dangote Group, gestures after signing a factory construction contract with Sinoma International Engineering Co. Ltd. in Lagos, Nigeria, on Wednesday, Aug. 26, 2015. Dangote Cement has expanded capacity five-fold in the last four years as the company invested outside its home market. Photographer: Tom Saater/Bloomberg
THE $20 billion Dangote Petroleum Refinery has slashed the price of diesel by 16.6 per cent to N1,000 per litre, from N1, 200 per litre in order to assist in impacting Nigeria’s domestic economy
The price of diesel was relatively high for months, due mainly to the importation of the product from the global market and foreign exchange crisis associated with it.
But in a statement obtained by Vanguard today, the company, stated: “In an unprecedented move, Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.
“While rolling out the products, the refinery supplied at a substantially reduced price of N1,200 per litre three weeks ago, representing over 30 per cent reduction from the previous market price of about N1,600 per litre.’
Significant reduction
According to the company, “this significant reduction in the price of diesel, at Dangote Petroleum Refinery, is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country.”
Recently, Chairman of Dangote Group, Alhaji Aliko Dangote, said that his refinery’s capacity to sell diesel at greatly reduced prices would offer immediate relief to Nigeria’s inflation challenges.
Dangote revealed that his refinery had been selling diesel at N1,200 per litre, compared to the previous market price of N1,650–N1,700.
He added that he was expecting a dramatic reduction in fuel costs to help drive down inflation in the coming months.
Dangote made this known while speaking with newsmen after visiting President Bola Tinubu to celebrate Eid-El-Fitr in Lagos.
Impact of devaluation
He said: “There’s quite a lot of improvement because, if you look at it here, one of the major issues that we’ve had was the narrow devaluation that has gone very aggressively up to about N1,900.
“But right now we’re back to almost N1,250 or N1,300, which is a good improvement.
“And you can see quite a lot of things have actually gone up. Even people now when you go to the market, for example, something that we produce locally, like flour or whatever, people will charge you more.
“Why? Because they’re paying very high prices on diesel. And what we did, for example, in our refinery, we started selling even diesel at about 1,200 for 1,650.
“And I’m sure, you know, as we go along, things will continue to improve quite a lot.
“Well, even now it’s a lot of impact. If you look at it now, when you are buying N1,650, N1,700 for a liter of diesel, and that one has been cut off by almost one third to now be paying diesel at 1,200.”
Expectation
He said: “And maybe eventually going forward, even though the crude prices are going up, even with that, I believe people will not get it much higher than what it is today.
“N1,200, it might be even a little bit lower. But that can help quite a lot. Because if you are transporting locally-produced goods, rice and other stuff, you are paying N1,650.
“Now you are paying two thirds of that amount, N1,200. It’s a lot. It’s a lot of difference. People don’t know.
“That can actually help to bring inflation down immediately. And I’m sure when the inflation figures are out for the next month, you see that there’s quite a lot of improvement in the inflation rate.
“So one step at a time. And I’m sure the government is working around the clock to make sure that things get much better.
“Because it’s in their own interest. It’s in the interest of everybody, It’s in our own interest, and I just want to thank everybody for the Nigerians to get things better.”
SOURCE: VANGUARD
