By Tahir Ibrahim Tahir Talban Bauchi.
The multi billion dollar investment of Aliko Dangote in the form of the world’s largest single chain refinery, the largest refinery in Africa, and perhaps, the largest refinery owned by an individual in the world has seen a lot of ‘crazy’, from inception to completion. 20 billion dollars in a single investment in a third world country definitely deserves to be called a ‘crazy’ investment. It is however a very patriotic and ambitious undertaking which would rescue our energy needs, as Nigeria continues to bleed under a 30 year regime of the importation of petroleum products, despite being Africa’s largest producer of crude oil. Dangote’s energy vision was clear, and his determination steely, as he set to deliver a world class refinery on the shores of our country. This colossal project by one of our own, is truly one of the most remarkable feats ever accomplished by any Nigerian. This is greatness in clear view. It is no wonder that in the heat of his ordeal with regulators of the Nigerian petroleum industry, the likes of business tycoon Femi Otedola, The President of the Africa Development Bank, Dr. Akinwunmi Adeshina, and The President of Afrexim Bank Benedict Oramah, were all aligned in support of the business maverick, Aliko Dangote, Nigeria’s largest employer of labor aside the Federal Government.
The energy minister of Saudi Arabia had warned Dangote over the construction of the refinery and advised him not to go ahead, arguing that refineries were built by countries or oil conglomerates and not individuals. True to this advice, one can agree that, if the Dangote refinery were built by NNPC Ltd, it wouldn’t have faced the hurdles in its tracks, placed by numerous entities/ players in the oil industry. International Oil Companies, IOCs, wouldn’t have denied the refinery the supply of crude if it were NNPC owned, would they? They dare not try to sell crude to the refinery at 6 dollars above market prices, and agents certainly would not have the temerity to charge 4 dollars as commission/ agent fees. The Nigerian Upstream Petroleum Regulatory Commission, NUPRC has had to wield the big stick, citing section 109(2) of the Petroleum Industry Act, which obligates the IOCs to supply crude to domestic refineries. The Dangote refinery would not have come under publicly scathing commentary from the Nigeria Upstream and Downstream Petroleum Regulatory Agency, NMDPRA, if it were owned by the State or NNPC, would it? For a 20 billion dollar investment, suffice to say that it was sure to face 20 billion dollars worth of challenges, subterfuge and sabotage. The calculated risks have been handled well by the development of the refinery. It has now moved to the phase of dealing with those unforseen or uncalculated factors.
In the face of all these human and unforseen challenges, reprieve has come the way of the dangote refinery, as President Bola Ahmed Tinubu has approved and directed that crude oil be supplied to Dangote refinery in naira by NNPC Ltd. The Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga made this known yesterday, stating that the move is to ensure the stability of the pump price of refined oil and the dollar naira exchange rate. Dangote requires 15 cargoes of crude worth 13.5 billion dollars, and the NNPC has committed to supply atleast 4 every year to the Dangote refinery. The Federal Executive Council, FEC, has also approved that the 450,000 barrels of crude meant for domestic consumption be offered in naira to domestic refineries, using Dangote as pilot. Mr. Bayo Onanuga also stated that Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Ltd. He further explains that this game changing intervention will eliminate the need for International letters of credit, which would save the country a lot of dollar payments.
This Presidential intervention is huge for the Dangote refinery on so many fronts. Dangote was prepared to pay for crude in dollars, and this has just made it easier and perhaps cheaper for him to pay in naira. It also means that he is guaranteed crude supply, which is the mainstay for the operation of his refinery. It also guarantees him the 450,000 barrels of crude for domestic production for the time being, and an additional 4 cargoes supply of crude worth 4.5 billion dollars yearly from NNPC Ltd. President Tinubu’s intervention is coming after the meeting between NNPC officials and Aliko Dangote, at the instance of the State Minister of Petroleum, Dr. Heineken Lokpobori. The naira denomination of these transactions surely, even if marginally, is poised to make Petroleum Motor Spirit, PMS, cheaper to the Nigerian consumer, as against prices across other African countries, and the world over. President Tinubu’s directive has thrown a spanner in the works of those building the narrative that Dangote refinery is not receiving the backing he needs from the Presidency. Dangote refinery is housed on the Lekki Free Trade Zone which is a brainchild project of President Tinubu. The likes of Dangote refinery are the kinds of projects that were envisaged to occupy the Lekki Free Trade Zone. Whether the naira denomination of the crude supply was agreed earlier or not, Mr. President has waded into the crises faced by Dangote, and issued a firm directive with a Federal Executive Council approval, as well as further directives that are supposed to obscure the challenges faced by the full take-off of the Dangote refinery. Afterall the NNPC had an agreement in place to own 20% of Dangote refinery which has been reduced to just 7.2%! So Mr. President has timely and rightly intervened for Dangote. We hope that the NNPC, its subsidiaries and other regulatory agencies see to the execution of Mr. President’s directives. I like this one Mr. President. You’ve done quite well.
Tahir is Talban Bauchi.
