Penultimate Monday’s directive by President Bola Ahmed Tinubu to the Nigerian National Petroleum Company Limited(NNPCL) to start selling crude oil to Dangote Refinery and other upcoming local refineries in Naira is a welcome relief.
Although the presidential intervention in the tiff between Dangote Refinery and oil sector regulators appears to have come a bit late because it(row) had festered badly and further cast a big slur on the nation’s already dented image in the comity of oil-producing nations, it remained a clincher. It is a jinx breaker of a sort that is bound to thaw out the slew of fireworks that had been raging over the needless altercation.
There had been bitter recriminations between Dangote Refinery and oil sector regulators— NNPCL and the Nigeria Midstream and Downstream Petroleum Regulatory Authority(NMDPRA) in the last one month over the sale of crude oil and other operational niceties.
Last month, the Vice-President of Oil and Gas at the Dangote Group, Devakumar Edwin, had accused international oil companies(IOCs) of denying Dangote Refinery purchase of crude oil, adding that whenever they consented to sell at all, they would race the price $6 higher than the global value.
The refinery also accused the NMDPRA of continued issuance of import licences to petrol marketers to import adulterated diesel, when Dangote Refinery can meet local demand. The Chief Executive Officer of NMDPRA, Farouk Ahmed, shot back, alleging that diesel from Gangote Refinery and modular refineries like Waltersmith and Aradel contained high sulphur levels.
He added that Dangote Refinery was yet to obtain its operating licence, accusing the President of the Dangote Group of always seeking monopolistic advantages in any operating environment.
A highly peeved Aliko Dangote debunked those claims and threw a two-fold challenge at the NMDPRA boss to reveal publicly the laboratory where his agency conducted its tests showing that his diesel had high sulphur content. He also volunteered that two samples of his diesel be taken for a fresh testing to establish the veracity or otherwise of Ahmed’s claims. Neither of the two challenges was taken up by the regulator.
It, however, soon came to light that the regulator’s accusations were no more than a tissue of porkies contrived to de-market Dangote Refinery! A delegation of the House of Representatives visited Dangote Refinery on July 20, three days after the NMDPRA boss made his specious claims, and the truth eventually came out.
Ahmed had claimed that Dangote Refinery’s diesel and that of other local refineries contained between 650 and 1,200 parts per million(ppm) of sulphur, which made their products toxic. But the tests of Dangote Refinery’s diesel conducted at the behest of the visiting federal lawmakers actually revealed 87.6 ppm normal range of sulphur, whereas the samples of imported diesel had between 2,000 and 18,000 ppm, making them highly toxic and dangerous to health!
This development prompted members of the green chamber of the National Assembly, shortly before President Tinubu’s intervention, to seek the NMDPRA boss’s suspension to allow an unfettered investigation into the whole imbroglio.
In between, the splutter of mud also smeared NNPCL’s Chief Executive Officer, Mele Kyari, when an enraged Dangote opened what looked like a Pandora’s box by alleging that some officials of the nation’s oil giant, oil traders and terminals have opened blending plants in Malta, an Island county in Southern Europe, from where they import substandard petroleum products.
“Some of the terminals, some of the NNPC people and some traders have opened blending plants somewhere off Malta. We all know these areas. We know what they are doing,” Dangote told the House of Representatives on Monday July 22.
Kyari, in his defence, denied owning any blending plant in Malta, neither is he aware of any NNPCL’s employee who does. Reacting in a post on X handle the following day, he challenged Dangote to publicly name the NNPCL officials who own blending plants in Malta. The business mogul is yet to respond.
However, the matter should not be allowed to die like that. It is reassuring that the two chambers of the National Assembly have resolved to probe the row between Dangote Refinery and the regulators. We must particularly get to the bottom of the blending plants saga. It could be revealing after all.
While the acrimony and exchange of verbal britbats raged, the nation’s not-too-good image as the only oil-producing country still importing refined petroleum products it could easily produce at home, plummeted further. As Africa’s richest man, even long before he ventured into oil and gas business, Dangote has been an international player and a quintessential business maestro.
His near-$20 billion, 650,000 barrels per day-capacity behemoth, sitting comfortably on 2,635 hectares of vast land, said to be six times the size of Victoria Island, Lagos, is the world’s biggest single train facility. So, naturally, due to the refinery’s sheer magnificence and vast prospects, the world’s binoculars are constantly trailed on Nigeria.
But the embarrassing crude oil drama, the duplicity and perfidy of the regulators against the nation’s largest private investment so far, which has forced Dangote to source crude from far away United States of America and Brazil are an unfortunate anti-climax to an enthralling saga. They are also ruinous to our frenetic search for foreign direct investment(FDI),especially at a time President Tinubu has been globetrotting to woo investors.
The needless row has expectedly stirred outrage from a broad spectrum of Nigerians, especially the top notch, cerebral class, shortly before the presidential intervention.
“The conflict between Aliko Dangote and officials of NMDPRA is troubling,” former Vice-President Atiku Abubakar wrote on its X handle. He added: “The 650,000 bpd refinery is essential for our energy needs and economic stability and NNPCL’s investment underscores its importance.
“If we neglect this, we risk deterring vital foreign direct investments(FDI). No investor will trust a nation that undermines its key assets. Protecting significant investments like Dangote’s is essential to attract FDI and drive our economic growth.”
Dangote’s friend and co-billionaire, Femi Otedola, in a lengthy post, in which he drew apt inferences from other countries, argued forcefully that a man like Dangote needs to be strongly supported by the government and everyone.
“In Nigeria,” he said, “we have our own titans and it is imperative that we recognize and support them. Aliko Dangote has broken every boundary in worldwide business and industry. His contributions are not just a testament to his brilliance but a beacon of what is possible when vision meets opportunity.
“Supporting local champions like Dangote is crucial for our national development and economic independence.”
“This whole issue on Dangote is shocking and creating waves for Nigeria globally,” wrote Akimwunmi Adesina, President of African Development Bank(AfBD).
He continued: “We must not be myopic. This whole disparaging of Dangote is uncalled for. It is self-defeating. And it is very bad for Nigeria. Who will want to come and invest in a country that disparages and undermines its own largest investor?
“Investing is tough. Pettiness is easy. It sadly sends a signal that the price for sacrificing for Nigeria is to get sacrificed!”
President Tinubu’s silence while the fireworks raged was ominously curious and stakeholders felt concerned about it. His eventual intervention, however, comes across as the elixir that will hopefully change the narration and calm the raging verbal storm.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga, said the decision to sell crude to Dangote and others in the local currency, which was adopted penultimate Monday by the Federal Executive Council(FEC), presided over by President Tinubu, “is to ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate.”
He said the exchange rate would be fixed for the duration of the transaction. “Afrieximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPCL,” the presidential media aide wrote in a post on his X. “The game- changing intervention will eliminate the need for international letters of credit further saving the country of dollar payment,” Onanuga added.
Briefing newsmen earlier after the FEC meeting, the Chairman of the Federal Inland Revenue Service(FIRS), Zach Adedeji, said the sale of refined products from Dangote Refinery to distributors would also be conducted in Naira.
President Tinubu deserves the thumbs-up for being an intrepid leader who has the courage of his convictions, in taking this bold step. There is no doubt that selling crude to Dangote Refinery and other local refineries is a big blow to and bad business for the fuel importation ‘cabal’.
But it is a potential tinderbox, unless it is enforced to the letter with presidential eagle-eyed finesse because the powerful oil cabal may not give up easily. Dangote’s tiff with the regulators is, indeed, an eye opener. It is now pellucid, crystal clear why none of the nation’s four refineries has been allowed to work in spite of the billions of dollars that had been dissipated into the incredulously dubious and duplicitous turnaround maintenances(TAMs) of the refineries, believed to have gulped no less than N12 trillion since 2010.
It is despicable and unthinkable that some unconscionable and wicked individuals still want the nation to continue to shamefully import refined petroleum products in spite of our four refineries and the world’s largest single train, that can easily meet local demand, and the foreign exchange challenge as well as the strain on our own currency.
The policy on crude oil sale will definitely shore up the value of the Naira, conserve scarce foreign exchange and ultimately lower inflationary rate. It will also drastically reduce the pump price of the products. And the multiplier effect is bound to ultimately reduce the costs of living.
The nation is said to be currently spending about $660 million monthly(about $7.93 billion annually) to import fuel, which is about 30-40 per cent of our foreign exchange earnings.
The lifeline granted Dangote Refinery and others to buy crude in Naira will help conserve the amount being spent importing fuel because Dangote Refinery has said it is capable of meeting local fuel consumption and still have enough for export.
Nigeria’s current daily fuel consumption is 44.3 million liters per day, 33.58 per cent reduction from the figure of 66.7 per cent before deregulation. Dangote Refinery said it will be producing 53 million liters per day and 1.1 million tonnes per day.
The Senate lauded President Tinubu for what it described as his “forward-looking and impactful decision” on the crude oil concession, expressing confidence that the lifeline offered to Dangote Refinery will strengthen the Naira.
Speaking through the Chairman of its Committee on Finance, Sen. Sani Musa, the Red Chamber of the National Assembly, said: “This strategic move is a significant milestone in our nation’s journey towards economic self-sufficiency and stability. By allowing transactions in our local currency, this policy will not only strengthen the Naira but also reduce our dependence on foreign exchange.
“This will likely lead to increased efficiency within our local refineries, boosting domestic production and ensuring a more consistent and affordable supply of refined petroleum products for all Nigerians.”
In the final analysis, no matter the “sins” and perceived weaknesses of Dangote as a mortal man, he deserves all the support that can be mustered to make his 650,000 bpd behemoth fly.
What is more, among the array of business men and women with acumen, who are making us proud as a nation, Dangote stands out like an iroko tree stands gaudy among shrubs. He remains the largest private employer of labour who has his tentacles imprinted in many sectors of our economy.
Most of the investments of this highly detribalised Nigerian are in Nigeria and in spite of the increasingly tough operating environment, which has seen the exodus of multinationals out of this country, he has refused to be deterred.
Significantly, out of 25 investors granted licences in 2016 to build refineries, he was the only one who had the courage to dare the difficult terrain. Smarting from his unfair, denigrating experience, however, he is almost regretting taking up the challenge. This should not be.
In essence, if the oil ‘cabal’ will not allow our refineries to work, let us embrace the Dangote Refinery alternative lifeline for a steady flow of the fuel, a gift Providence has endowed us with aplenty.
Comments are closed.