Africa’s wealthiest individual, Aliko Dangote, is contemplating the sale of his multi-billion-dollar oil refinery to NNPC Limited, Nigeria’s state-owned energy company, due to ongoing disputes with the federal government.
The 650,000 barrel-per-day refinery, which commenced operations last year after a decade of construction, has encountered several challenges, including difficulties in securing crude oil from international suppliers.
NNPC, which has a supply agreement with the refinery, has only delivered 6.9 million barrels of oil since last year.
This shortfall has compelled the refinery to seek alternative sources from countries like Brazil and the United States.
Expressing his frustration, Dangote stated he is prepared to relinquish the project if it benefits the nation. “Let them (NNPCL) buy me out and run the refinery the best way they can. They have labelled me a monopolist. That’s an incorrect and unfair allegation, but it’s OK. If they buy me out, at least, their so-called monopolist would be out of the way,” Dangote said in a recent interview with Premium Times on Sunday.
Dangote, who has a long-standing presence in Nigeria’s cement, salt, and sugar industries, has found the oil and gas sector particularly challenging. The refinery’s construction cost soared to $19 billion, more than double the initial estimate, with the potential to significantly reduce Nigeria’s dependence on imported fuel and save up to 30% of foreign exchange spent on imports.
Despite these challenges, the refinery, expected to deliver its first petrol batch to the Nigerian market in August, has been operating at just over half capacity due to issues in sourcing crude oil from international producers. “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,” Dangote said.
“This refinery can help resolve the problem, but it seems some people are uncomfortable with me in the picture. 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,” he added.
Dangote’s potential decision follows a series of obstacles, which he believes vindicate the caution urged by friends and associates when he invested heavily in Nigeria’s economy. “Four years ago, one of my very wealthy friends began to invest his money abroad. 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 interest groups. That friend has been taunting me in the past few days, saying he warned me and that he has been proven right,” Dangote revealed.
Recently, Devakumar Edwin, Vice President of Oil and Gas at Dangote Group, accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of allowing the importation of substandard fuel. In response, NMDPRA’s CEO, Farouk Ahmed, countered that diesel produced by Dangote’s refinery and other facilities, such as Waltersmith and Aradel, contains high sulfur levels, which could harm vehicle engines and the environment.
During a tour of the Dangote Petroleum Refinery and Dangote Fertiliser Limited complex by House of Representatives members, Aliko Dangote disputed the regulator’s claims. Lab tests conducted during the tour indicated that Dangote’s diesel contains only 87.6 ppm of sulfur, significantly lower than the 1800 ppm and 2000 ppm found in imported samples.
Dangote challenged the regulator to conduct an impartial comparison of the quality of his refinery’s products versus imported ones, advocating for a fair assessment to determine the best interests of Nigeria. Additionally, Dangote announced he would cease his investment in Nigeria’s steel industry to avoid further accusations of monopoly.
