Recent Developments Suggest Discord Between Dangote and Nigerian Government Agencies
Recent events indicate a growing rift between Aliko Dangote, Africa’s richest man, and certain Nigerian government agencies.
Many Nigerians had hoped that the commencement of Dangote’s refinery operations would lead to a significant reduction in petroleum product prices. However, this expected outcome has yet to materialize.
Despite being a major crude oil producer in Africa, Nigeria still relies heavily on importing petroleum products, including Premium Motor Spirit (PMS), kerosene, diesel, and aviation fuel.
The Nigerian government operates four refineries, located in Port Harcourt, Kaduna, and Warri, but they are currently non-functional. As a result, many had expected Dangote’s refinery to alleviate the situation.
Initially, the Nigerian government, through the Nigerian National Petroleum Corporation (NNPC), was slated to hold a 20% stake in the refinery. However, recent developments suggest a shift in this arrangement.
Dangote Reveals Reduced NNPC Stake and Payment Dispute
At a press conference on July 14, Aliko Dangote announced that the NNPC’s stake in the Dangote refinery had been reduced from 20% to 7.2%. He attributed this change to NNPC’s failure to pay the balance of their share, which was due in June, despite a one-month grace period.
This revelation marked the beginning of a widening rift between Dangote Refinery and NNPC.
It’s worth noting that this development comes after the Economic and Financial Crimes Commission (EFCC) raided the Dangote Group’s office in Lagos in January, amid allegations of foreign currency allocation abuse by the Central Bank of Nigeria.
Accusations and Denials: Dangote Refinery, NUPRC, and NMDPRA
A series of allegations and counter-allegations have emerged between Dangote Refinery, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Dangote Refinery’s Claims
- International Oil Companies (IOCs) in Nigeria refuse to sell crude oil to Dangote Refinery or offer it at higher prices than the official rate set by NUPRC.
NUPRC’s Response
- Gbenga Komolafe, NUPRC’s chief, dismissed Dangote’s claims as “erroneous,” stating that crude oil sales to refiners are based on a “willing buyer, willing seller” principle.
NMDPRA’s Allegations
- Ahmed Farouk, NMDPRA’s chief, alleged that Dangote Refinery’s diesel production has a higher sulphur content (650-1,200ppm) than the recommended level (50ppm) for West Africa, making it inferior to imported diesel.
- Farouk also accused Dangote of seeking to monopolize the market by requesting a halt to all importation, especially of AGO and Jet Kero, and directing marketers to his refinery.
Dangote’s Denial
- Dangote refuted NMDPRA’s allegations, claiming his refinery produces the cleanest diesel in Nigeria and inviting regulators to conduct tests on his products.
- In a recent interview, Dangote expressed willingness to sell his refinery to the Nigerian government if they wish to buy it, citing unfair allegations of monopoly.
- Dangote Halts Steel Production Plans
- Aliko Dangote recently announced that his company has abandoned its previous plans to venture into steel production.
- During a recent statement, Dangote revealed that his company’s board of directors decided to halt steel production plans due to concerns about being labeled a monopoly and potentially encouraging imports.
- He stated, “If we venture into steel production, they will call us names like monopoly, and it will also encourage imports. So, we don’t want to go into that.”
- Dangote added, “Let other Nigerians take on the steel business. We are not the only ones in Nigeria, and there are others with more resources than us.”
- This development comes after Islamic clerics in Kano State, Dangote’s hometown, organized prayers for the success of the Dangote Refinery a few months before its launch. It seems that Dangote may need those prayers now more than ever.
- House of Representatives Launches Investigation
- In response to the ongoing disputes between Dangote Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the House of Representatives has initiated an investigation to uncover the truth behind the matter.
- Ikenga Ugochinyere, Chairman of the House Committee on Petroleum Resources (Downstream), revealed to BBC Pidgin on Monday that the investigation is underway, following a visit to the Dangote refinery facility on Sunday.Ugochinyere stated, “We have commenced the investigation, and in the coming days, we will make our findings public. As the chairman of the committee, I remain impartial and will listen to all parties involved. We will analyze the evidence and announce our findings accordingly.However, Ugochinyere did not specify a timeline for completing the investigation.
