Dangote Accuses Government of Sabotage, Offers to Sell 650,000 BPD Dangote Refinery To NNPC

Oluwasegun SanusiJuly 21, 20242 Mins read462

Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.

Aliko Dangote has offered to sell his multibillion-dollar oil refinery to the state-owned energy company, Nigerian National Petroleum Corporation (NNPC) Limited, accusing the government of sabotage.

This is coming amid loggerheads with regulatory authorities in Nigeria. In an exclusive interview with PREMIUM TIMES, Dangote said,

“Let them buy me out and run the refinery the best way they can. They have labelled me a monopolist. That’s an incorrect and unfair allegation, but it’s OK. If they buy me out, at least, their so-called monopolist would be out of the way.”

The $19 billion, 650,000 barrel-per-day refinery said to have begun production last year after over a decade in the making—more than twice its initial estimate.

According to reports, the refinery promises to reduce Nigeria’s reliance on imported fuel and hopefully save about 30 per cent of the total foreign exchange spent on imports.

Notwithstanding these advantages, the refinery has been dogged by problems. The capacity utilisation of the refinery has been a little over half its installed capacity since January as it labours to secure supplies of crude from overseas producers.

According to Dangote Refinery, suppliers either ask for outrageous premiums or claim no crude is available.

The cordial relationship that once stood between Dangote Refinery and NNPC has turned sour as the latter is delivering only about 6.9 million barrels of oil to the plant as of May, sources at S&P Global Platts reported.

Dangote expressed himself saying, “As you probably know, I am 67 years old, in less than three years, I will be 70. I need very little to live the rest of my life. I can’t take the refinery or any other property or asset to my grave. Everything I do is in the interest of my country.”

The decision came after years of Dangote’s domination of Nigeria’s cement, salt, and sugar markets.

Dangote has been in business, from cement to farming, for years, but his entry into the oil and gas sector has proved nightmarish.

Slated to release its first-ever product supply of petrol into the Nigerian marketplace this August, its progress has suffered setbacks due to regulatory and supply obstacles.

The businessman also shared another angle: friends and associates had warned him against investing so much in the Nigerian economy because of the inconsistencies in policy and interest groups.

“Four years ago, one of my very wealthy friends began to invest his money abroad. I disagreed with him and urged him to rethink his action in the interest of his country. He blamed his action on policy inconsistencies and shenanigans of interest groups. That friend has been taunting me these past few days, saying he warned me and that he has been proven right,” Dangote recounted.

The yet-to-be-in-operation refinery has recently been embroiled in a controversy over fuel quality.

The Vice President of Oil and Gas at Dangote Group, Devakumar Edwin, accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority last month of allowing substandard fuel to be imported into the country.

Just days ago, Farouk Ahmed, the chief of NMDPRA, was quick to respond, stating that diesel from the plant belonging to Dangote, as well as other modular refineries like Waltersmith and Aradel, contained high sulphur levels.

However, after the statements of NMDPR’s chief, both Dangote Petroleum Refinery and Dangote Fertiliser Limited were toured by members of the House of Representatives, including Speaker Tajudeen Abbas. The company released a statement saying the representatives observed the testing of Automotive Gas Oil (diesel) from two petrol stations alongside Dangote Petroleum Refinery; Dangote debunked the claim by NMDPR.

Recall Dangote had said the Nigerian National Petroleum Corporation (NNPC) now holds only a 7.2 per cent stake in the refinery, down from its initial 20 per cent—the reduction in NNPC’s shareholding results from the corporation’s failure to meet its financial obligations.

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