The chief executive officer, Pinnacle Oil and Gas, Robert Dickerman, has urged Nigerian not to expect massive fuel price reduction as a result of production from the $20 billion Dangote Refinery adding that any crude oil sold to Dangote in Naira will displace the foreign exchange that would have been earned by selling that crude for dollars and that products sold by Dangote in Naira locally will offset that loss, as an avoided cost benefit, avoiding dollar outflow for imports
Speaking at this year’s National Association of Energy Correspondents (NAEC) international conference held in Lagos, Dickerman said that Dangote Refinery and Petrochemical is a private business, funded with enormous risk capital, both equity and debt, with most of the debt in dollars. Although NNPC has approximately 7 percent of the equity, operating control clearly lies in private hands. The investor who made massive investment in the Dangote Refinery had every expectation of realizing market price for their products, yielding a market return on the refining margin, called crack spread in the industry. This margin would consider the locational advantage and size of the plant, as there are economies of scale.
