Aliko Dangote, Africa's wealthiest man, has announced his willingness to sell his multibillion-dollar oil refinery to the state-owned energy company, NNPC Limited. The announcement comes amid a heated dispute with a key equity partner and regulatory authorities in Nigeria.
The $19 billion refinery, located in Lagos, started operations last year and has a capacity of 650,000 barrels per day. Initially estimated to cost $9 billion, the project promises to reduce Nigeria's dependence on imported fuel and save up to 30% of the country's foreign exchange spent on imports.
In an exclusive interview with PREMIUM TIMES, Dangote stated, “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.”
The refinery has faced challenges, operating at just over half its capacity since January, primarily due to difficulties in sourcing crude from international producers. Companies have been demanding high premiums or claiming unavailability of crude. NNPC, which had previously supplied crude to the refinery, delivered only 6.9 million barrels by May 2023, despite a supply agreement and a 20% equity participation deal, of which only 7.2% has been fully paid for.
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Dangote expressed frustration over the situation, citing that obstacles faced by the refinery have validated the concerns of friends and associates who advised caution in investing heavily in the Nigerian economy. He emphasized his readiness to let NNPC take over to ensure the refinery's potential benefits for Nigeria.
The refinery has also been embroiled in a dispute over fuel quality. Last month, Dangote's vice president for oil and gas, Devakumar Edwin, accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of allowing the importation of dirty fuel. In response, NMDPRA's chief, Farouk Ahmed, claimed that diesel from Dangote's refinery had high sulphur levels.
However, recent tests conducted in the presence of members of the House of Representatives revealed that Dangote’s diesel had a sulphur content of 87.6 ppm, significantly lower than the imported samples which exceeded 1800 ppm and 2000 ppm. This debunked Ahmed's claims and supported the refinery's quality standards.
Dangote also announced halting his investment plans in Nigeria's steel industry to avoid accusations of monopoly and encourage imports. “Our board has decided that we shouldn’t do the steel because if we do the steel business, we will be called all sorts of names like monopoly. And then also, imports will be encouraged,” he stated.
This development marks a critical moment in Nigeria's energy sector, with potential significant impacts on the country's fuel supply and economic stability.
