There is a disturbing development in the Nigerian oil industry. It is the orchestrated gang-up against a new and fast growing entrant: Dangote oil refinery. Surprisingly, at the head of this conspiracy is the industry regulator, the NNPCL in tandem with its subsidiaries. Paradoxically, the NNPCL was the very one that gave Dangote a license to set up a refinery. Lining up behind it are international oil companies (IOCs). There are five of them in Nigeria, including Shell Producing Development Company, TotalEnergies, Chevron, ExxonMobil and Eni.
What brings them together is that they all are involved in the importation of petroleum products. They see the emergence of Dangote refinery as a threat to their very lucrative business. They have accused it of monopoly simply because it has called for an end to product importation. They say he has seized the foreign exchange market and his refinery’s products, diesel specifically, are contaminated. Exactly, typically giving a dog a bad name in order to hang it. But why this open animosity? Simply because the people who oppose Dangote want product importation to continue. The huge petrodollar earnings from it are too appetizing qto give up.
They keep up the scam through creating artificial product scarcity, blatant blackmail and falsehood. Importation fetches more money than domestic refining. In the late 1990s, President Olusegun Obasanjo approved 11 licences for privately owned refineries. But the applicants failed to pick them up. One, they found out that it was easier to make big profit from importation than production because the government was subsidizing imports heavily. The NNPCL, which was the government’s monopoly and major importer of petrol, is suspected to have connived with the smaller IOCs to keep up the scam. Part of the plot was never to allow the four refineries built by the government to restart production.
We believe also that the NNPCL, the IOCs and local importers are similarly in cahoot to frustrate the exploration of crude oil deposits in parts of the country like the abandoned Kolmani oil works in Bauchi state and another oil field in the Lake Chad axis of Borno state. This is despite confirmed availability of hydrocarbons in commercial quantity in those areas. Reason: hold down local exploration for continued importation and access the lucrative but questionable subsidies.
The plot also includes blackmailing and ruining anyone who would attempt to break their stranglehold on the import chain. For instance, Dangote is being accused of contaminating the diesel it produces with high content sulphur. This allegation has been found to be altogether false. A high-powered House delegation, led by Speaker Tajudeen Abba’s, that investigated the charge, indeed, found that Dangote’s diesel was cleaner than that imported by the IOCs and sold exorbitantly in filling stations. He was so impressed by Dangote’s production standards that he proudly declared, “Each corner of this facility (refinery) resonates with the echoes of hard work, dedication, and an unyielding pursuit of quality. It is evident that every drop produced here carries not just oil but also the hopes and dreams of millions who yearn for a brighter future. We are deeply impressed by what we have seen, which confirms the rating of this industry as the single largest oil refinery in Africa. This remarkable achievement does not merely reflect corporate success; it symbolises national pride, a tribute to what can be accomplished when visionary leadership meets relentless determination.”
And so also has the allegation of monopoly against Dangote been dismissed as petty by no less than the president of the African Development Bank (AfDB), Dr Akinwunmi Adesina, himself a Nigerian. In a written statement, he said Dangote’s move to have the Nigerian government ban further fuel imports was not anti-competition. “Has Dangote Refineries prevented any other company from setting up refineries?” he asked. “Why have have others not done so? How come they have not done so after several decades? Was it Dangote that held them back? Dangote Refineries surely cannot be asked to ‘compete’ with importers of petroleum products. That is no competition. Let the importers set up local refineries and compete by refining in Nigeria. That is fair and justified competition.”
The gauntlet has been thrown down. Let the daring dare.
And in the face of these unholy developments in the oil sector, we suspect strongly that the government is being blackmailed to relax the rules. Despite the initial political razzmatazz on withdrawal of subsidy, we read severally that the subsidy regime, indeed, has been discretely reinstated, in fact, in a bigger way this time. In other words, fuel importation promoters have proved to be above the law.
Who will rein them in, if the government is unable, or unwilling, to do so?
