Only Dangote Can Decide Price Of His Petrol – Sowunmi

The Chairman of the Energy Transition Study Group at the Nigerian Gas Association, Olabode Sowunmi, has said only Aliko Dangote can decide how much petrol from his refinery will cost.

Recall that Dangote, on Tuesday, in his refinery vicinity, while answering questions from newsmen, said the Federal Executive Council (FEC) would have a role to play in what the price of his petrol would cost per liter.

In an interview with Arise TV, on Wednesday, Olabode Sowunmi said only Dangote and not regulators would decide the price of petrol from his refinery. This, he said, is because the refinery is not an NGO, but a business established to return profit.

“Dangote Refinery is a refinery, so there is an average cost of refining. That cost is going to be passed on to the final consumer. There is an average cost to the price of crude oil. So, at the end of the day, they are going to sell not at the prices that people want, they are going to sell at a price that is competitive and to some extent, profitable for them.

“I do not know any business venture that runs like an NGO. The aim of NGOs is not to make profit, it is to develop. However, when it comes to a venture, where somebody has put in capital and somebody has taken risk and somebody has put in their own effort and spirit of entrepreneurship, the primary purpose is profit.

“So, I do not know why people will expect that all that investment will take place in the Dangote Refinery and there will be no profit. It is possible, but I don’t know how that will work. But whether that is the corporate strategy of Dangote Refinery to operate at a loss and have some kind of subsidy for it, which will be welcomed, I don’t know whether that will be the situation. But the facts on ground is that Dangote Refinery is a business and as a business, it is in the business of refining to make profit.

“Dangote too is a business and the first duty of any private business is to its shareholders. It’s not a developmental organization, so it’s not going to run its business and its debt based on a loss. They are going to run it at what is competitive and what has an average profit for them. So, those are also facts that we as Nigerians need to come to terms with,” Sowunmi said.

The Chairman of the Energy Transition Study Group at the Nigerian Gas Association explained that with the refinery now in place, Nigeria can actually have statistics on what the daily consumption of the citizens is.

He added that the refinery would also help to stabilize the naira and grow the country’s economy.

Sowunmi noted that most expectations of Nigerians on the price of fuel coming down because of Danote’s refinery may not be realistic as every decision would be determined by facts and data.

“We’ll recall that Dangote’s crude oil is being sold to it in naira. That has advantages across boards in many areas. One of the things is that they are not under pressure to go and procure dollars in terms of buying one of the key things in their operation, which is the crude oil itself.

“Which also means that they are more or less obligated to do the pricing of their products in naira, ab initio because one of the key components of the final products is in naira. So, those are where the advantages will be.

“The other issue will now be, how much of the refined products that Dangote is producing will actually meet Nigeria’s capacity? As at today, nobody really knows. There are different figures. The house of statistics has their own figure, NNPC has their own figure, there are different figures in terms of what we use daily and there are a million and one reasons that are behind it.

“But I believe that one of the things that will check that, will be if Dangote himself as he has pledged and said, that they’d be able to monitor every single truck that leaves their depot and monitor them to where they get to. If they are able to do that and it meets our needs, then we’ll have a clear idea of the amount of consumption we do per day in terms of petroleum products.

“The best person to my mind who can give a clear idea of how much petrol can come up from Dangote Refinery is the refinery itself. It’s not the regulator. The regulator can only speak with respect to facts that have been made available them,” Sowunmi added.