Aliko Dangote, Africa’s richest man and the president of Dangote Group, has expressed disappointment over the Nigerian National Petroleum Company Limited (NNPC) reducing its stake in his 650,000 barrels per day refinery in Lagos from 20% to 7.2%.
In a recent interview with Bloomberg Television, Dangote labeled this decision as a significant error.
Dangote explained that the NNPC’s choice to lower its investment was puzzling, especially given the structured agreement they had.
He emphasized, “We gave them a good deal. They wanted to change the agreement to pay cash instead of the structured arrangement we had.”
This shift has left Dangote as the majority owner of the refinery, raising questions about the NNPC’s future role in the oil sector.
Despite the stake reduction, Dangote announced that the NNPC has pledged to supply 390,000 barrels per day to the refinery starting in October.
He stated, “This will help stabilize the Naira by reducing pressure on it by about 40%.”
According to Dangote, selling crude in local currency will have a positive impact on Nigeria’s economy.
“Petroleum products consume about 40% of our foreign exchange,” he noted.
Dangote pointed out that imported fuel is 15% to 20% more expensive than what is produced at his refinery.
He argued that local refining will ease the financial burden on consumers.
“Fuel from my refinery can stabilize the Naira and help reduce costs for Nigerians,” he explained.
While Dangote revealed that he has two oil blocks that will begin production soon, he has no plans to make significant investments in Nigeria’s upstream oil sector.
“Our upstream is not big. We have two oil blocks, and we are starting production this October,” he said.
Dangote acknowledged that the decision to remove fuel subsidies rests solely with the federal government.
He said, “Subsidy is a very sensitive issue. If you are subsidizing something, people will inflate prices, and the government will end up paying more than necessary.”
He called for a robust agreement between the government and the refinery regarding product supply.
To ensure that fuel remains in Nigeria, Dangote plans to implement a tracking system for distribution trucks.
“We are going to put a tracker on them to make sure they are delivering within Nigeria,” he stated.
This measure is aimed at preventing fuel smuggling and improving the government’s financial standing.
Dangote also addressed discrepancies in pricing between his refinery and imported fuel.
He noted that recent announcements from NNPC about fuel prices were misleading.
“The price they announced is higher than what they bought from us. Our product is actually cheaper than their imported fuel,” he clarified.
This revelation adds another layer to the ongoing discussions about the local oil market.
In a separate matter, Dangote commented on a recent visit by the Economic and Financial Crimes Commission (EFCC) to his office.
He described the incident as an attempt to embarrass his company, despite cooperating fully with the agency.
“They came, didn’t talk to anybody, and just left. It was just to register an embarrassment,” he said.
