President of the Africa Development Bank, Akinwunmi Adesina, has cautioned the Bola Tinubu administration to forego pettiness and make room for Dangote Refinery to thrive. He added that the government’s hostile body language to the refinery sent a wrong signal to potential foreign investors. Meanwhile Heineken Lokpobiri, Minister of State Petroleum Resources (Oil), has convened a high-level meeting with key stakeholders in the oil sector to resolve issues concerning the Dangote Refinery, according to a statement by the oil ministry. The meeting, held on Monday in Abuja, had Aliko Dangote, Chairman/CEO of Dangote Group, and Farouk Ahmed, the Nigerian Midstream and Downstream Petroleum Regulatory Authority CEO (NMDPRA), in attendance. Others were Gbenga Komolafe, Nigerian Upstream Petroleum Regulatory Commission chief executive and Mele Kyari, GCEO of the Nigerian National Petroleum Company Limited.
In a statement on Tuesday, Mr Adesina stated that while “pettiness is easy,” investing was “tough,” considering that very few entities, if any at all, could afford to invest $19.5 billion, as Dangote had done, in a country where the economic climate was “fraught with policy uncertainties.” His remarks follow allegations of monopoly made by the head of Nigeria’s oil regulator, NMDPRA, Farouk Ahmed, who said that Dangote Refinery was seeking to become the exclusive supplier of refined crude products to the nation’s oil marketers. How many individuals or companies can do railways? How many can do refineries of the scale of Dangote Refinery?” Mr Adesina said. Mr Adesina countered the allegations stressing that few entities had the funds and wherewithal to invest $19.5 billion to build a refinery as large as Dangotes’ and that his wanting to be sole fuel supplier in the nation —after investing such enormous amount— was justified and did not equate monopoly.
He added, “No smart investor would make a $19.5 billion investment and want it to be undermined by importers.” He also said that there was no evidence to label Dangote refinery as “anti-competitive” and questioned whether it had “prevented any other company from setting up refineries?” According to Mr Adesina, asking Dangote to compete with importers “is not competition. Let the importers set up local refineries and compete by refining in Nigeria. That is fair and justified competition,” Mr Adesina said. The AfDB president explained that disparaging Dangote in the media would only harm Nigeria’s economy among its international counterparts as it would dissuade foreign investors if they saw how the country was treating its largest investors. “This whole disparaging of Dangote is uncalled for. It is self-defeating. And it is very bad for Nigeria. Who will want to invest in a country that disparages and undermines its own largest investor?” Mr Adesina noted.
A recent face-off in the industry saw the leadership of the Dangote Group, NMDPRA and NNPCL disagreeing over pertinent issues. Dangote had declared that the NNPCL no longer own a 20 per cent stake in its refinery, stressing that the Nigerian oil company now owns only 7.2 per cent of the refinery due to its failure to pay the balance of its shares, due in June. The NNPCL, however, said the decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago. The NMDPRA was also at loggerheads with Dangote over issues bordering on licences, claiming that the Dangote refinery was at its pre-commissioning stage while its diesel was below international standards. Dangote, however, refuted the NMDPRA’s claim. Dangote also accused the International Oil Companies of frustrating its refinery operations by selling crude oil to it through their foreign trading arms, offering cargoes at two to four dollars per barrel, above NUPRC’s official price. Against this background, the minister convened the meeting to find a lasting solution to the current impasse affecting the Dangote refinery, with all parties demonstrating commitment to collaborative and proactive problem-solving.
Mr Lokpobiri emphasised the importance of cooperation and synergy among all stakeholders. He said this would ensure the success and optimal performance of the oil and gas sector, which he described as pivotal for Nigeria’s economic growth and energy security. The stakeholders expressed gratitude to the minister for his exemplary leadership and timely intervention in facilitating the dialogue. The meeting marked a significant step towards resolving the challenges and underscores the minister’s dedication to fostering a conducive environment for Nigeria’s oil and gas sector. The coming onstream of the $20 billion Dangote Refinery, with a refining capacity of 650,000 barrels per day (bpd) in 2023, gave impetus to the country’s oil sector as it would ensure that Nigeria was not reliant on fuel from overseas.
