Africa’s largest petrochemical refinery, the $20.5-billion Dangote Oil Refinery owned by Aliko Dangote, the continent’s richest person, has reduced the price of Automotive Gas Oil (AGO), commonly known as diesel. This follows an earlier statement by Dangote this month.
The refinery, which has been making headlines with a series of moves recently, cut the price of diesel to N1,000 ($0.877) per liter. This represents a significant decrease from the N1,200 ($1.052) per liter price quoted by the refinery two weeks ago.
Dangote Refinery cuts diesel price, boosting inflation fight
The price reduction underscores Dangote’s commitment to stabilizing commodity prices. Last week, he expressed his belief that lower diesel costs could offer relief from Nigeria’s inflationary pressures. He argued that a reduction would translate to lower transportation and logistics costs, a major factor driving up consumer goods prices.
Dangote, with a net worth estimated at $17.2 billion, according to the Bloomberg Billionaires Index, spoke to reporters following a visit with Nigerian President Bola Tinubu last week. He expressed optimism about Nigeria’s economic trajectory and emphasized the role his refinery plays in that progress.
Projecting an optimistic outlook, Dangote believes inflation will decline. He stated, “Nigerians have been patient and I also believe that a lot of goodies will now come through. There’s quite a lot of improvement because if you look at it, one of the major issues that we’ve had was the naira devaluation that has gone very aggressively up to about N1,900. “But right now, we’re back to almost N1,250, N1,300, which is a good reprieve.”
Dangote Refinery marks milestone
The recent price cut follows the commencement of operations at the Dangote Oil Refinery, a landmark achievement for Nigeria’s pursuit of energy independence. The refinery boasts the world’s largest single-train capacity (650,000 barrels per day) and aims to lessen the country’s dependence on imported fuels.
Following the refinery’s launch, Aliko Dangote initiated the process of establishing a separate oil trading division, with London as a potential headquarters. This move signifies a significant shift from traditional practices. The objective is to streamline crude oil and product supply chain management for his $20-billion petrochemical complex.
Industry sources report Dangote’s intention to reduce reliance on major trading firms by handling the supply chain internally. “He’s going to try and do it himself,” said a source. The new trading team, reportedly led by former Essar trader Radha Mohan, is presently recruiting additional staff.
