Aliko Dangote, Africa’s richest man, has expressed his willingness to sell his oil refinery to the Nigerian National Petroleum Company (NNPC) Limited amid allegations of monopoly. The accusations were made by Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Over the weekend, Ahmed claimed that the Dangote refinery had not been licensed to begin operations in Nigeria.
He stated that Dangote’s request to halt all importation of petroleum products would create a monopoly and negatively impact the nation’s energy security. Ahmed also raised concerns about the quality of the petroleum products produced by the Dangote refinery, asserting they were inferior to imported products.
In an interview with Premium Times on Sunday, Dangote responded to the allegations, saying, “Let them (NNPCL) buy me out and run the refinery the best way they can. They have labelled me a monopolist.”
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Dangote, reflecting on Nigeria’s longstanding fuel crisis, emphasized the potential of his refinery to address these issues. He noted, “We have been facing a fuel crisis since the 70s. This refinery can help in resolving the problem but it does appear some people are uncomfortable that I am in the picture.
“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. So, I am ready to let go, let the NNPC buy me out, and run the refinery. At least the country will have high-quality products and create jobs.”
The Dangote refinery, inaugurated in May 2023, has a capacity of 650,000 barrels per day and sits on 2,635 hectares of land in the free zone area of Ibeju-Lekki, Lagos. The facility began producing diesel on January 12, but petrol production is scheduled for August due to various delays, including crude supply challenges and a fire outbreak.
To address the constraints on accessing crude feedstock from international oil companies (IOCs) in Nigeria, the refinery has been importing crude from countries like Brazil and the US. At its inauguration, the refinery announced a supply deal with the NNPC and a previously agreed 20 percent equity participation. However, only 7.2 percent of this stake had been fully paid for by the deadline.
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Dangote mentioned that the difficulties his refinery is encountering seem to validate the caution advised by his friends and associates. “Four years ago, one of my very wealthy friends began to invest his money abroad,” Dangote said. “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 in the past few days, saying he warned me and that he has been proven right.”
In early June, Dangote noted that some IOCs were struggling to supply crude to his refinery. On July 15, Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), dismissed this claim as “erroneous,” emphasizing that the Petroleum Industry Act (PIA) includes provisions for willing buyer-willing seller transactions. Despite this, the management of Dangote Industries Limited insisted that the IOCs were obstructing their efforts to purchase crude feedstock.
On July 18, Farouk Ahmed reiterated that local refineries, including the Dangote refinery, were producing inferior products compared to imports.