By Olumide Johnson
The debate over why petrol remains expensive in Nigeria has taken a new turn, with Alhaji Aliko Dangote, President of Dangote Petroleum Refinery and Petrochemicals, arguing that the price cannot be assessed without considering the much higher prices in neighbouring countries. His warning also comes as geopolitical tensions in the Middle East raise fresh concerns about petroleum-product availability and as investors begin trading the Dangote Petroleum Refinery and Petrochemicals IPO.
DEVELOPMENT:
Speaking on Arise TV on Tuesday, Dangote said that petrol smuggling remains a major factor sustaining pressure on domestic supply because traders can buy at lower Nigerian prices and resell across the border at substantial premiums.
“You know, expensive is relative. In the sense that today, maybe, you know, a lot of them, there’s ignorance also. What they need to do is ask, what’s the neighbour’s price?”
Dangote said that neighbouring markets are generally 30 to 50 percent more expensive than Nigeria, creating a powerful arbitrage incentive.
“I don’t know if you know that there’s still a lot of smuggling of the same petrol we are producing to our neighbouring countries.”
He cited Niger, where he said petrol costs 20 to 25 percent more than in Nigeria.
“So, what business are you going to do that will make you have an instant 25 percent return?” he asked.
He explained that petrol destined for domestic markets could be diverted towards border communities where it can command higher prices.
DATA:
At a domestic reference price of N1,350 per litre, a 20 to 25 percent premium in Niger would create a potential cross-border price gap of roughly N270 to N338 per litre. Dangote said neighbouring-country price differentials generally range from 30 to 50 percent.
The refinery’s N2.15 trillion IPO also puts the downstream transformation in sharper financial context. The offer comprises 4.1 billion ordinary shares at N525 each, with a minimum subscription of 10 shares, valued at N5,250. It closes on October 13, 2026.
SIGNIFICANCE:
The issue goes beyond petrol pricing. Persistent cross-border arbitrage can distort domestic supply, undermine legitimate distribution and weaken the effectiveness of domestic pricing policies.
At the same time, the Middle East crisis introduces a separate risk. Dangote warned that the immediate concern may increasingly become product availability rather than price.
“And the problem now, going forward, I must also warn that this crisis in the Middle East is not even about price; it’s about availability,” he said.
NEXT MOVE:
The critical indicators are domestic petrol availability, border flows, price differentials with neighbouring countries and the impact of Middle East disruptions on global petroleum markets.
Dangote assured Nigerians that his refinery would maintain supply.
“We will deliver to Nigeria. Nigerians don’t need to worry. There will not be any shortage from our own part.”
“There won’t be any shortage. There will not be any queues. We will make sure that we keep satisfying the market, despite all odds,” Dangote stated.
OUR LENS:
Nigeria’s petrol challenge is increasingly a contest between domestic pricing, regional arbitrage and supply security. As local refining expands, the policy challenge shifts from simply producing petrol to ensuring that domestic output stays within the domestic market at commercially sustainable prices.
The Dangote refinery IPO adds another dimension: the downstream transformation is now becoming an investable public-market story, making supply reliability, pricing efficiency and regional market dynamics increasingly important to investors.
Olumide Johnson is a journalist, reporting on energy, business, markets, policy and developments shaping Nigeria’s economy.
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