By Newspot Nigeria Editorial Desk
Aliko Dangote built his refinery using loans in U.S. dollars. Those loans must be repaid in dollars, not naira. But fuel from the refinery is sold in Nigeria, where consumers pay in naira—a currency that has continued to lose value. That is the core of the issue.
When the refinery project started, the exchange rate was more stable. Today, the naira is over ₦1,500 to one dollar. That means Dangote now earns far less, in dollar terms, from each litre of fuel sold. So while many Nigerians expect low prices simply because the refinery is local, the cost of building and financing it is still tied to the global dollar economy. Selling too cheap means risking default or collapse. Selling too high means public backlash.
Despite this, Dangote’s refinery recently sold fuel at around ₦825 per litre, lower than NNPC’s ₦950 at the time. This pushed NNPC to adjust its price downward. Some marketers and insiders started accusing Dangote of creating a price war. But this is not a price war—it is the outcome of local refining becoming competitive.
Many Nigerians are asking, “Why is Dangote setting the price instead of NNPC?” The answer is that Dangote is refining the product. NNPC is still importing most of what it sells. The supplier who controls actual production will always influence market prices more than the one who relies on imports.
There are legitimate concerns about monopoly, especially given Dangote’s dominance in other sectors. But discouraging competition because one player is ahead is not the solution. The way to address dominance is by encouraging more investment, not blocking the few that already exist.
The truth is that the refinery could still be a good thing for Nigeria if the environment around it is made better. That includes access to stable foreign exchange, regulatory clarity, and policies that don’t punish local producers. Otherwise, the cost of repaying loans taken in dollars will always put pressure on those trying to build anything meaningful here.
What Nigerians want is fair pricing and consistent supply. Whether it comes from Dangote or NNPC is secondary. If the government wants fuel to be more affordable, it needs to stabilize the currency, support more refineries, and stop shielding inefficiency with false alarms.
Dangote’s refinery isn’t perfect, but it is not the problem. The structure of the Nigerian economy is.
— Newspot Nigeria
