The NNPCL/Dangote Suspect Challenge

Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), regulators of the Nigerian petroleum industry “held the phone”, and said so many denigrative things about Dangote Refinery. It wasn’t ready, it cannot deliver, its products are below standard… and so many similar derogatory comments. It was a shocker to say the least. It cast doubts on the $20 billion investment. One would have thought that they would be at the forefront of protecting the integrity of such a huge indigenous investment.

Notwithstanding, Dangote Refinery pulled through, producing diesel while crashing its price, aviation fuel, and eventually premium motor spirit (PMS), popularly known as petrol. What do you expect from the largest single chain refinery in the world? The best quality of petrol, with 10ppm sulphur content. Within no time, Dangote Refinery was exporting fuel to South Africa and other European countries.
It was Dangote’s turn to “hold the phone” and hit back at NNPCL. He revealed that some marketers were “blending” in Malta and supplying substandard petrol to Nigeria. He added that he was also approached for the lease of some of his facilities where some marketers would warehouse their blended products for sale to the Nigerian public.

Armed with these revelations, Nigerians introduced themselves into the suspect challenge between Dangote and NNPCL. While “holding the phone” Nigerians hit at NNPCL left right and centre, when it announced that the Port Harcourt Refinery had begun the production of petrol. Some said it was a lie, as usual with NNPCL’s several unsuccessful announcements over the take-off of the refinery. Other experts like Prof. Wumi Iledare said that it cannot start at 90 percent capacity on day one.

Many others claim it is blending c5 resins with naphtha to produce petrol. Others said that the 60km pipeline that supplies crude from Bonny Terminal to the Port Harcourt Refinery is not functional due to leaks from vandalisation. The secretary of the Alesha community stakeholders alleged that only six trucks were loaded and claims products are from old stock of the old Port Harcourt Refinery. Nigerians became oil industry experts overnight, and were pointing out holes in the whole Port Harcourt Refinery take off story. The NNPCL has refuted all these claims of course. But curiously, it says the new segment of the Port Harcourt Refinery will take off without prior announcements. Does it realise however that it owes us a huge degree of transparency? There are reports already that the Port Harcourt Refinery has stopped production.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) were not left out of the suspect challenge. When they “held the phone”, they announced that the petrol from Port Harcourt Refinery would sell at N1,030 per litre.

This makes Dangote’s petrol way cheaper at a cost of N970 per litre. Long before this, Dangote had announced that he was selling his petrol at a much cheaper rate compared to the rate at which NNPCL were importing the product. This was way back when petrol was selling at about or less than N900 per litre retail price. They didn’t allow Dangote to sell to marketers back then and they didn’t allow him to announce a price.

A little later on, NNPCL announced a hike in price that landed us at over N1,000 for fuel. Marketers were then allowed to buy directly from Dangote, even though they claimed that it was too expensive for them.
Today, Dangote Refinery is back to importing crude for its operations as NNPCL has failed to meet its obligations in providing the refinery with crude oil. This is against the Petroleum Industry Act and against Mr. President’s directive.

The naira-for-crude deal is suffering a setback. The idea that our forex expenditure on imports would be saved is becoming a fairytale. The hopes of Nigerians enjoying low fuel prices is slowly being dashed. With these developments, the possibility of the Dangote Refinery running into the ground is highly unlikely, as it can continue to export its products globally.

But the benefits Nigerians would have enjoyed is what is at stake now, as it is more than evident, even to teenagers, that some very powerful people are bent on denying us these benefits. Petrol business is big business and the cabals won’t just be weaned off the billions they’re making off it. Not without a big fight. A big and long fight.

The only way I see Nigerians winning in this fight, is having even lower prices from Dangote Refinery. If diesel that was sold at N1,800 or more could come down to N1,000 or N1,200, I am sure such can be the case with petrol, If and only if the cabal is taken out of the equation of course. I won’t be surprised if we hear another price reduction of say N900 per litre from Dangote Refinery. For now, this suspect challenge between the two is just warming up.