On September 23, Aliko Dangote, the founder of Dangote Petroleum Refinery, said petrol is about 40 percent cheaper in Nigeria than in Saudi Arabia.
Dangote spoke during an interview with Bloomberg TV.
Speaking about the subsidy situation in Nigeria, the billionaire entrepreneur said it is the right time to stop the payments.
“For example, in Saudi, the citizens believe that oil is our God-given gift and should not charge us for it. Government was selling it at a very low price,” he said.
“But today, as we speak, gasoline is about 40 percent cheaper in Nigeria than in Saudi Arabia, which I think does not make sense.”
VERIFICATION
Data from Saudi Aramco, the Saudi Arabian oil group, showed that for September, the price of octane 95 petrol is 2.33 riyals per litre while octane 91 petrol is 2.18 riyals in the country.
According to the company, the octane number is related to the engine’s compression ratio, which indicates the fuel’s anti-knock ratio and establishes the maximum compression the petrol can withstand before igniting.
As of September 25, the Central Bank of Saudi Arabia said the exchange rate for N1 is 0.002280 riyal, which means 1 riyal exchanged for N438.5.
Consequently, the price of octane 95 petrol in naira is N1,021.92 per litre while that of octane 91 petrol is N956.14 riyals.
On the other hand, on September 3, the Nigerian National Petroleum Company (NNPC) Limited increased the petrol price across its retail outlets to N855 per litre.
After converting the riyal value to naira, the naira denomination was used to determine the difference between petrol prices in both countries.
As a result, Saudi Arabia’s petrol is 17.78 percent (for octane 95 petrol) and 11.16 percent (for octane 91 petrol), respectively, more expensive than that of Nigeria.
Moreover, converting the petrol prices of both countries to dollars would lead to a similar result which is way less than the 40 percent Dangote claimed.
