In the heat of the allegation by Aliko Dangote that international oil companies and NNPCL were denying his refinery access to Nigerian crude oil, some commentators wondered why Dangote did not do his homework and secure guaranteed regular supply of crude oil from NNPCL and the IOCs before investing almost $20 billion into building what is reputed as the biggest refinery in the world.
Its an unusual assumption to make for a project the Nigerian government had repeatedly touted as the final solution to the spectre of importation of refined products that orchestrated the bleeding of the economy through a nebulous oil subsidy regime.
Apart from banking on it, the federal government had also invested public funds into the project. Initially put at 20 percent of the stakeholding, Godwin Emefiele, former governor of the Central Bank of Nigeria (CBN) had claimed on May 22, 2023 when then President Muhammadu Buhari initially commissioned the refinery before its completion that the Dangote Group had paid back 70 percent of the loans it took to construct an oil refinery. But earlier this July, Dangote himself announced that NNPCL’s shareholding has been whittled down over failure to pay the balance of the value of its stake in June. “Now, they only own a 7.2% stake in the refinery,” he declared.
On July 29, 2024, Dangote Refinery’s nightmare was summarily resolved. President Tinubu unilaterally ordered NNPCL to sell crude oil and in naira to the refinery. In addition to committing to supply four of the 15 cargoes of crude oil required yearly at a cost of $13.5 billion, the Federal Executive Council (FEC) approved that the 450,000 barrels allocated for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pivot.
The reprieve for Dangote came after a curious but intriguing layers of false claims were put up by oil industry chiefs from NNPCL to undermine and justify their refusal sell crude oil to the refinery. After the claim that Dangote’s products were inferior to imported ones fell like a pack of cards with the revelation that the refinery’s laboratory had certified that its own products have superior quality to the ones NNPCL imports, a false narrative was invented. According to the story promoted by the state oil company, due to operational and technical problems, the refinery was reselling crude oil from the United States and Nigeria.
Stating that it is not authorised for it to resell crude acquired in Nigeria, Anthony Chiejine, Dangote Industries Limited spokesman, urged the public to disregard what he termed as false narratives intended to discredit the refinery. Not one to shy away from this sort war being waged against his conglomerate, Aliko Dangote himself fought back. He pointedly accused those running Nigeria’s oil industry of mischief for personal interests. He alleged some personnel of NNPCL, oil traders and terminals have opened a blending plant in Malta, affirming that the areas of the blending plants are known. Pointedly, he said “some of the terminals, some of the NNPC people and some traders have opened a blending plant somewhere off Malta,” he said. We all know these areas. We know what they are doing.”
More than the support Nigerians gave to Dangote in the face of the illogical attempts by NNPCL bigwigs to cripple the refinery, his allegation ruffled feathers. Although no names were mentioned, top state operatives queued to exonerate themselves. Mele Kyari, group managing director of NNPCL, went a step further to dare Dangote to name the culprits. The billionaire didn’t have to go that far for the impact was instantaneous.
Even Oando plc which Dangote never mentioned got involved. In a tweet amplified by Bayo Onanuga, President Tinubu’s spokesman amplified, he said Oando, “Nigeria’s leading indigenous oil firm” debunked rumours that its directors are the owners of an oil blending plant in Malta.
Oil business is denominated in dollars with the chain so complex that Nigeria could have earned incomes across various frontiers. The National Shipping Policy enunciated by Ibrahim Babangida’s administration had stipulated that Nigerian-owned ships should be involved in the affreigtment of crude oil export. The policy stipulated that they should be allowed to lift at least 50 percent of crude oil export. Indigenous shipping companies had noted that more than $600 million is spent annually for the transportation of crude oil across the oceans. Enabling them to be part of it could potentially plough $300 million of that back into the economy. And given that oil is lifted under Cost, Insurance and Freight (CIF) terms, more income could have earned by Nigeria if local insurance companies were involved in the provision of marine insurance cover.
NNPC rebuffed every move to involve Nigerian companies in the lucrative, but oily business. Tinubu’s intervention is timely and appropriate. The only issue is why it took this long for him to call to NNPCL top guns to order. But having started, he should go the whole hug.
Officials in the behemoth’s reputation for their infamous inclination to shield their operations from critical prying eyes of the public, including lawmakers is legendary. They definitely misfired in their latest venture to cripple an organisation Nigerians had pinned their hope for getting refined products at a cheaper rate. The cartel is powerful, very powerful. They are richer than Nigeria and the government and can go all the way to maintain the status quo. President Tinubu should sustain the tempo of his intervention and complete the job. He should get rid of the present crop of managers of the subsidiaries of NNPCL as well as the behemoth itself and open up the company to public scrutiny. Will he, can he?
