Business

Some Nigerians are reportedly using their savings, taking loans and even selling personal belongings to raise money to buy shares in the Dangote Petroleum Refinery. The refinery opened its Initial Public Offering on September 14, giving Nigerians the opportunity to own shares in the company. The offer consists of 4.1 billion ordinary shares priced at 525 naira each, with a minimum subscription of 10 shares, costing 5,250 naira. The company plans to raise about 2.15 trillion naira to help fund an expansion that could nearly double the refinery’s capacity to 1.4 million barrels per day. However, investment experts have warned Nigerians against borrowing money, selling properties or committing all their savings to the offer, stressing that investments in shares carry risks. The IPO is expected to close on October 13.

Dangote says petrol prices in Nigeria remain high despite local refining because the Dangote Refinery still buys crude oil at prevailing international market prices. Speaking on Arise TV, the President of Dangote Group, Aliko Dangote, said the refinery paid as much as 124 dollars per barrel for crude in May, making it difficult to sell petrol at significantly lower prices. He also said petrol prices in neighbouring countries are between 30 and 50 percent higher than in Nigeria, which has contributed to the continued smuggling of locally produced petrol across the borders. Dangote assured Nigerians that there would be no fuel shortage or queues, saying the refinery would continue supplying the market despite the challenges. He also identified high interest rates, inconsistent government policies and inadequate electricity as major obstacles to industrialisation in Nigeria. On succession, Dangote said having a male heir was not a priority for him, adding that any of his three daughters could eventually lead the Dangote Group. He said he wants the company to be professionally managed with strong corporate governance, regardless of whether a family member eventually takes control. Dangote said his ultimate legacy is to contribute to the industrialisation of Africa and encourage more large-scale investments across the continent.

President of the Dangote Group, Aliko Dangote, says petrol selling at N1,350 per litre in Nigeria remains cheaper than in neighbouring countries. Dangote says petrol prices in those countries are between 30 and 50 per cent higher than in Nigeria, making cross-border smuggling more attractive. He disclosed this during an interview on Arise TV on Tuesday. According to him, the price gap is encouraging traders to move petrol from Nigeria into neighbouring countries where they can make higher profits. Using Niger as an example, Dangote said petrol is currently about 20 to 25 per cent more expensive there than in Nigeria. He questioned why traders would ignore an opportunity to make an immediate 25 per cent return by moving the product across the border. Dangote added that the price difference continues to make petrol smuggling financially attractive despite efforts to curb the practice.

Oil marketers in Nigeria are preparing to increase the pump prices of petroleum products following a surge in international crude oil prices above $100 per barrel. The rise is being driven by escalating tensions in the Middle East and fears of disruptions to global oil supplies, raising concerns about higher fuel, transport and production costs in Nigeria. The OPEC Basket, which includes Nigeria’s Bonny Light, climbed above $100 per barrel from about $95, representing an increase of roughly 5.2 per cent. Brent crude also rose to $100.60 per barrel, while Murban crude increased to $118.30. Lagos State Chairman of the Petroleum Retailers Outlets Owners Association of Nigeria, Joseph Ehimen, said marketers would review pump prices after their next purchases, depending on prevailing market conditions and associated costs. However, Nigeria may not fully benefit from higher crude prices because its oil production remains below target. OPEC data showed that the country’s crude output fell from 1.51 million barrels per day in June to 1.44 million barrels per day in July. Economists warned that sustained high crude prices could increase the cost of diesel, transportation, freight and other energy-dependent activities, potentially pushing up the prices of goods and services. Despite the international price surge, petrol prices in Lagos remained largely between N1,266 and N1,300 per litre on Wednesday. Dangote Refinery sold at N1,266 per litre, while other depots recorded varying prices. The Association of Small Business Owners of Nigeria described the development as a mixed blessing, saying higher oil prices could boost government revenue and foreign exchange earnings but would also increase operating costs for businesses and reduce household purchasing power. Industry experts urged the Federal Government to use any additional oil revenue to strengthen domestic refining, improve public transportation, support vulnerable households and businesses, and reduce the impact of rising energy costs. They also advised the government to avoid returning to broad petrol subsidies, instead focusing on targeted measures that can cushion Nigerians while strengthening the economy.