ASO Villa insiders have told Economy Post that Africa’s richest man and President of Dangote Group, Mr Aliko Dangote, is not loved by President Bola Tinubu’s government and should guard his comments.
Mr Dangote has set up a $20 billion refinery in Lekki, Lagos, but he can’t get crude to service his refinery. Several reports show he buys crude from the United States and other countries to keep his refinery in operation.
A report said on May 17, 2024, that the refinery was seeking to buy 24 million barrels of US crude over the next year to ramp up processing rates.
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In frustration, his group has made several comments showing that its operations are being stifled by some forces who want it failed.
Vice-President for Oil and Gas at Dangote Industries Limited (DIL), Mr Devakumar Edwin, had, on June 23, accused international oil companies (IOCs) in Nigeria of trying to scuttle Dangote Refinery.
Edwin had told journalists at a one-day training in Lagos that IOCs were deliberately frustrating the refinery’s efforts to buy local crude by raising product prices above the market rate. He said the situation had forced the refinery to import crude from the United States and other nations, raising its operating costs.
He had also accused the NMDPRA of granting licences indiscriminately to marketers to import “dirty refined products into the country.”
“The Federal Government issued 25 licences to build refinery and we are the only one that delivered on promise. While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude,” Dangote Group’s Vice- President had noted.
He had also said the regulator recently met with crude oil producers and refinery owners in Nigeria to ensure full adherence to Domestic Crude Oil Supply Obligations (DCSO), as enunciated under section 109(2) of the Petroleum Industry Act (PIA).
He, however, said it seemed the IOCs’ objective was to ensure that Dangote Refinery failed, stressing that it was either they were deliberately asking for ridiculous/humongous premium or they would simply state that crude was not available.
“At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production. It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports crude oil and imports refined petroleum products.”
Fight with regulator
In response to the allegation, the NUPRC, which the regulator, said IOCs were willing to sell crude oil to domestic refiners.
On July 18, Dangote Group fired back at NUPRC, saying that IOCs were using middlemen to make crude expensive for him.
“These international trading arms are non-value adding middlemen who sit abroad and earn margin from crude being produced and consumed in Nigeria. They are not bound by Nigerian laws and do not pay tax in Nigeria on the unjustifiable margin they earn,” Dangote Group’s VP further said.
However, Nigerians were jolted on Friday, July 19, when Chief Executive Officer of NMDPRA, Mr. Farouk Ahmed, said that Dangote Petroleum Refinery did not have an operating license and was just 45 percent completed.
Ahmed said this in an interview with State House correspondents on Thursday, questioning the quality of Dangote Refinery’s products. He said that Dangote Refinery’s claim that there were continued efforts by IOCs to stifle its operations by way of low crude supply was false.
“Of course, there are lots of concerns about the supply of petroleum products nationwide and the claim by some media houses that we were trying to scuttle Dangote Refinery is not true,” he said.
He noted that “Dangote Refinery is still in the pre-commissioning stage. It has not been licensed. We have not licensed them yet. I think they are about 45 percent completed.”
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He said the country would not just rely on one refinery to feed it with petrol. “Dangote is requesting that we should suspend or stop all importation of petroleum products, especially automotive gas oil (AGO) or jet kero and direct all marketers to the refinery,” he further said.
He stressed that Dangote Refinery’s products were inferior to others in the market.
“In terms of quality, their quality is much, much inferior to the imported commodities,” he noted.
Aso Villa insiders warn
Two Aso Villa insiders who spoke with Economy Post has asked Mr Dangote to tread with caution and reduce publicity against the government or its agency.
One of them, who is close to President Tinubu, said: “Our government perceives some of the publicity stunts as an attack.”
“When you say that IOCs are sabotaging you, you are simply saying that the government is incapable of regulating IOCs, or you are pushing us against investors that have been here long before you came into the industry.
“You have not spoken to the president about this. All we hear are complaints in the media. I just want to caution him to guard his comments. He is an important entrepreneur to us, but we can’t create a monopolistic market for him to dominate as past governments did,” the source said.
Another Aso Villa source noted that “Dangote is playing politics” and “is not the only entrepreneur in the world.” The source said, “He has benefitted enough from Nigeria and should reduce his noise.”
Experts disagree
Economy Post has found that Mr Tinubu’s government has not given any sort of incentive or support to Dangote Refinery.
As a result, analysts say his government must be conscious of the impression his body language is giving investors.
“I am shocked by today’s comment by the regulator. That’s unfortunate. The government must not show investors that Nigeria is not for them. They must ensure they support Dangote and indeed every other investor who has put their hard-earned money here. It is tough to do business here, and to think that regulators will be confronting an investor is absurd,” an economist, Ms Cythia Brown-Cherries, said.
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A United Kingdom-based investment consultant, Dr Chuka Chile, cautioned the Tinubu government and its officials to be wary of the kind of comments made against investors.
“We must learn a lesson from other nations. I do not support Dangote’s monopoly target in every industry, but I don’t think investing $20 billion is child’s play. Let’s help him to grow, rather than pull him down,” Dr Chile noted.
