In hot water
Aliko Dangote is willing to relinquish his $19 billion oil refinery to the Nigerian National Petroleum Corporation (NNPC) amid disputes…
Aliko Dangote is willing to relinquish his $19 billion oil refinery to the Nigerian National Petroleum Corporation (NNPC) amid disputes over sulphur content and conflicts with partners. The 650,000 barrel-per-day refinery aims to reduce Nigeria’s reliance on foreign fuel. Dangote denies monopoly allegations, saying, “Let them buy me out and run it as they see fit.” He also announced he won’t invest in the steel sector to avoid similar labels. This surprise move comes after the refinery’s cost doubled initial estimates, and Dangote faces criticism from the NNPC and Nigeria Midstream Downstream Regulatory Authority (NMDPRA).
The spat between Mr Dangote and the NNPC/NMDPRA has been airing on national media over the last few days, and even international media organisations have picked it up. What appears clear is that the decision-makers in the NNPC/NMDPRA are not willing to give Dangote all the support he needs to optimise his refinery and take over the market. Firstly, the NNPC refused to make payments by way of cash or crude oil supply required to take up the option of a 20% equity stake in the refinery. More recently, the NMDPRA’s CEO made comments to the press that they cannot rely heavily on one refinery to supply petroleum products to the country because of the risk to energy security, including the fact that, in terms of quality, “the product is much more inferior to the imported quality.” That last comment appeared to trigger anger in Mr Dangote, who has rebuked the accusation repeatedly in various interviews and invited the NNPC/NMDPRA to buy him out. Nigerians have largely taken the side of Mr Dangote and labelled the NNPC/NMDPRA bosses as members of the elusive cabal/mafia who run Nigeria’s oil and gas sector in their own interest while stifling investments that can lead to its development. Whilst the junior petroleum minister has now intervened in the matter, President Tinubu has remained silent, leading many to speculate if he is on the side of the agency bosses.