Oil and gas expert Henry Adigun has pointed to production costs in US dollars as a key reason why the $20 billion Dangote Refinery in Lagos may not be able to sell a litre of Premium Motor Spirit (PMS), commonly known as petrol, below the new pump price set by the Nigerian National Petroleum Company Limited (NNPCL).
Adigun, who appeared on the socio-political program *Inside Sources* with Laolu Akande on Channels Television on Friday, explained that the petrol produced at the Dangote Refinery is of the highest quality, which generally leads to higher pricing.
He emphasized that the fuel industry operates in dollars, allowing refinery owner and billionaire businessman Aliko Dangote to set prices according to production costs and market conditions.
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Adigun said, “He (Dangote) has cost. The crude is given to him at a cost. He only gets 40% of the crude from NNPC, and spends money to buy the remaining from America and co. It’s a single-train refinery, you can’t use only one crude to produce all products. This is technical in a way.
“So, you have to blend American crude with Nigerian. That’s why, if Nigeria gives him all the barrels, he still has to import and blend them. People should not forget that.
“And I keep telling everybody, the man (Dangote) did not take the loan in naira; he took it in dollars and he has to pay the loans back in dollars.
Asked if Dangote will sell a pump price of petrol at N700, the expert said, “He cannot. I did the mathematics of his refinery and I said it in the meeting we had with his people and his team that there is no way your petrol will come out at less than N850. There is also retail cost.”
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