Facing monopoly allegations, Dangote has offered to sell his refinery to the Nigerian National Petroleum Corporation (NNPC). Discover the potential impact of this move on Nigeria’s oil sector.
Amidst ongoing conflicts with Nigeria’s regulatory authorities, Aliko Dangote – the richest person in Africa- has indicated his readiness to vend off his oil refinery to the Nigerian National Petroleum Company (NNPC) Limited.
During an interview with Premium Times on Sunday, Dangote uttered this statement.
Dangote stated that if NNPCL acquires his business and operates the refinery proficiently, they will brand him as a monopolist. Although he views this accusation as inaccurate and unjustified, he is fine with it. Moreover, in case of their purchase, their alleged monopoly would be eliminated by removing Dangote from the picture.
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The fuel crisis in Nigeria has been ongoing for a long time and Dangote believes his refinery can provide a solution, but he’s facing opposition which is frustrating. He thinks this resistance may be due to certain individuals feeling uneasy about his involvement. Additionally, he pointed out that at the age of 67 with less than three years till turning 70, he doesn’t need much to sustain him through the remainder of his life.
The billionaire stressed that his endeavors are for the benefit of Nigeria and conveyed, “All my pursuits serve the welfare of our nation. Therefore, I’m open to stepping down and allowing NNPC to take over operations at the refinery in order to produce superior goods and generate job opportunities.”
In May of 2023, the refinery belonging to Dangote was launched. It is located in Ibeju-Lekki, Lagos’s free zone area and boasts a daily capacity of 650,000 barrels. Diesel production commenced on January 12th; however petrol manufacturing has been postponed due to several problems such as limited supplies from crude sources abroad coupled with an inferno outbreak at the site. The supply chain issues have caused this facility to import crude oil from places like Brazil or America because they cannot get enough access domestically through international oil companies (IOCs) operating inside Nigeria itself.
During the inauguration, the refinery declared their agreement with NNPC for a supply deal and also committed to holding 20% equity share. Nevertheless, prior to the deadline of acquiring stake ownership, only 7.2 percent had been satisfactorily paid off by them.
Reflecting on his refinery’s challenges, Dangote acknowledged that he had received warnings from some acquaintances to exercise caution before investing vast amounts of money in Nigeria’s economy. One particular wealthy friend had even opted for foreign investments due to policy inconsistencies and the interference of interest groups. This same friend recently taunted Dangote by reminding him of their conversation and how it proved prescient.
On June 4, the difficulties regarding crude supply were brought to attention as Dangote publicly announced that certain IOCs struggled with providing sufficient resources for his refinery. The CEO of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, refuted this claim by asserting that within the Petroleum Industry Act (PIA) lies provisions for willing buyer-willing seller transactions. Nevertheless, despite these statements from NUPRC and other oil companies, Dangote Industries Limited affirmed their belief in IOC interference impeding necessary crude feedstock requests.
Farouk Ahmed, the CEO of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), expressed his disapproval towards local refineries on July 18. In particular, he criticized Dangote’s refinery for producing substandard products when compared to imports.
