Former President Olusegun Obasanjo has remarked that those benefiting from the profitable business of fuel importation are likely to attempt to sabotage the Dangote Petroleum Refinery.
This comment follows allegations by the President of the Dangote Group, Alhaji Aliko Dangote, that certain ‘mafias’ are working to undermine the $20 billion refinery.
It has been reported that as of Monday, the multi-billion dollar refinery and other domestic refineries have not yet purchased crude oil in naira, despite a directive from President Bola Tinubu to the Nigerian National Petroleum Company Limited (NNPC).
In an interview with the Financial Times, Obasanjo highlighted the significance of the Dangote refinery, stating, “Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria.” He added that those currently profiting from selling refined products to Nigeria might feel threatened and attempt to obstruct Dangote’s efforts.
Officials from the Dangote Group have recently claimed that international oil companies are obstructing the refinery by either refusing to sell crude or selling it at a premium of up to $4 above the usual price.
They also accused the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) of issuing licenses to individuals to import substandard fuel. The regulator denied this, asserting that Dangote’s diesel is inferior to imported alternatives. NMDPRA Chief Executive, Farouk Ahmed, stated that fuel importation would continue to prevent a monopoly by the Dangote Group.
Obasanjo further reflected on Nigeria’s economic strategy, criticizing the heavy reliance on oil and the neglect of gas and agriculture. “We made a very, very deadly mistake. We put all our eggs in one basket of oil. We even ignored gas. We were flaring gas, which is a very important commodity. We ignored agriculture, which should have been the centerpiece of our economic development.”
He recalled efforts to engage Shell in running Nigeria’s refineries, which the international oil company declined due to concerns over maintenance and corruption.
“When I was President, I invited Shell and I said, look, come and take equity participation and run our refineries for us. They refused. They said our refineries have not been well maintained. We have brought amateurs rather than bringing professionals. They said there’s too much corruption with the way our refinery is run and maintained. And they didn’t want to get involved in such a mess.”
Obasanjo questioned the government’s repeated promises to fix the refineries, asking, “How many times have they told us that? And at what price? Those problems, as far as the government refineries are concerned, have never gone away. They have even increased. So if you have a problem like that and that problem is not removed then you aren’t going anywhere.”
He also criticized President Bola Tinubu’s approach to removing fuel subsidies, suggesting that the administration should have first addressed the potential hardship caused by subsidy removal. “There’s a lot of work that needs to be done. Not just wake up one morning and say you removed the subsidy. Because of inflation, the subsidy that we have removed is not gone. It has come back.”
Obasanjo emphasized the need for investor confidence in Nigeria, advocating for a shift from a transactional to a transformational economy. He expressed concern over youth restiveness due to unemployment, warning, “Our youth are restive. And they are restive because they have no skill. They have no empowerment. They have no employment. We are all sitting on a keg of gunpowder. And my prayer is that we will do the right thing before it’s too late.”
Additionally, it was reported on Monday that the Dangote refinery and other local refineries in Nigeria have not started buying crude oil from NNPC in naira, as directed by President Tinubu. The Crude Oil Refiners Association of Nigeria indicated that letters have been sent to NNPC by individual refiners requesting crude, but there has been no response.
The Federal Executive Council recently adopted Tinubu’s proposal to sell crude to the Dangote refinery and other refineries in naira, using the Dangote refinery as a pilot. The 450,000 barrels meant for domestic consumption would be offered in naira, with the exchange rate fixed for the duration of this transaction. However, nearly a week after the announcement, the refiners have not received a response from NNPC.
Eche Idoko, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, said, “We have not started buying crude from NNPC. Individual members have written to them (NNPC) already, and they have several requests from these refineries before them.
“Typically, we would expect our regulator, in this instance, the NMDPRA, to kick start the process by calling for a meeting of all parties to discuss the framework for such supply or have NNPC respond to the various letters to it by the refineries requesting for crude.”
Idoko commended Tinubu for considering indigenous refiners but suggested that an executive order should be issued to enforce the new directive. He noted that supplying crude oil in naira would reduce fuel costs and strengthen the naira against the dollar. “Yes, we will see a rebound in the pricing of fuel once the President’s order is implemented. Mind you, the pronouncement alone is not enough. It must be with a force of law, either by executive order or by incorporating it into a new guideline so that the crude producers will be bound to sell to us in naira.”
The Dangote refinery and other domestic refineries have faced challenges in accessing crude oil for their operations. Recently, the Dangote Group claimed that international oil companies are still obstructing crude supply to the 650,000-barrel capacity refinery, insisting on selling through foreign agents and setting prices above the official rate.
A senior official at the Dangote refinery, who preferred to remain anonymous, confirmed that the plant had not started purchasing crude in naira from NNPC. Attempts to contact NNPC spokesperson Olufemi Soneye for comments were unsuccessful.
