While keeping in place a questionable fuel import regime that further weakens the naira and burdens the economy is bad for Nigeria, eliminating fuel importation without practical and workable alternatives also places a huge strain on the consumers and leaves them at the mercy of Dangote, who can then gouge prices.
Our Nigeria is like a rubber tree. A little causes it to swell, while a lot will not make it snap. This makeup makes Nigeria fascinating, and keeps the outside world on tenterhooks. Our disturbing penchant for absurdity leaves people in sober climes gasping for air.
It can only be heard in Nigeria that the largest oil producer does not have a working state-owned refinery to refine petroleum products for its people and local consumption. One will be hard pressed to think of any nation with enormous crude oil that exports its unrefined crude oil to other countries to be refined and then imports the refined crude oil into its country.
For years, many have wondered why Nigeria ditched its own refineries after letting them fall into disrepair, and why successive governments have not done much to revive these moribund refineries. The answer to this confounding reality is not far-fetched. The answer can be found in the midst of the motley crowd of carpetbaggers and rentseekers who place personal interests over public good. The answer is in the grand edifice of the petroleum ministry in Abuja. The answer is located in the monumental and imposing headquarters in Abuja. The answer is in the many fuel depots scattered across the country used by fuel importers. The answer is vested interests.
Seeing how hopeless the nation’s energy situation is and the damaged the sharp practices of unscrupulous men in the nation’s upstream and downstream sector are doing to the Nigeria, Nigeria’s richest man, Aliko Dangote, embarked on an ambitious and historical project with the construction of a Refinery and Petrochemicals is a 650,000 barrels per day (BPD) integrated refinery located in the Lekki Free Zone in Lagos. The $20 billion Refinery, which is the biggest in Africa, was completed and commenced operation in 2023. It will meet 100% of the Nigerian requirement of all refined products and also have a surplus of each of these products for export.
But since the opening of the refinery over two years ago, it has been beset by troubles peculiar to Nigeria’s business environment. He has not only been engaged in a tough and draining war of attrition with the many players in the downstream sector, from depot owners to independent marketers and fuel importers, he has also been involved in a messy standoff with regulators, especially Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) who he had accused of working with certain elements in the industry to create an environment so harsh and unconducive that will sabotage and frustrate the success of his refinery.
On Monday, at an explosive press briefing, Dangote questioned the luxurious and flamboyant lifestyle of the chief executive officer of the NMDPRA, Farouk Ahmed, which he claimed exceeded his income. He accused Ahmed of paying $5 million yearly for the tuition of his four secondary school years in Switzerland. He asserted that the current salary of Ahmed as the CEO of the regulatory agency cannot pay the tuition of his children in the swanky, elite and exclusive secondary school in Switzerland. On Tuesday, he released the details and breakdown of the foreign education tuition of Ahmed’s children. The reactions of Nigerians to the revelation have ranged from indifference, muted anger and outrage.
Dangote’s revelation of the alleged humongous foreign education tuition of the NMDPRA boss’s children is not the onset or opening act of a fresh squabble between a high-ranking officer of one of the nation’s regulatory agencies and a billionaire who feels he is being unfairly targeted, it is the climax of a long-standing standoff between Dangote refinery and NMDPRA. Dangote had already filed a suit in late 2024 (registered as FHC/ABJ/CS/1324/2024) seeking a court declaration that the regulator’s issuance of petrol import permits to the NNPC and other marketers was unlawful and should be set aside. The company argued that the permits frustrated the objective of domestic refining — in effect undermining the refinery’s economic viability and negating the government’s stated policy to stop petrol imports once refining capacity was available.
Since his refinery became operational, Dangote, a hitherto reclusive and taciturn man who is hardly seen in public, has not only become publicly chatty and vocal in calling out the corruption in Nigeria’s oil and gas sector but also appears to relish the attention his newfound anticorruption disposition and nationalistic fervour garners. His outing and exposure of Ahmed as a shady and sleazy head of NMDPRA, whose hand is stuck in the nation’s cookie jar, is not done out of altruism but because his business model is gravely threatened by certain vested interests.
And it is for this reason that Nigerians, though astounded and scandalised by Dangote’s disclosure, are not fixated on the matter as they believe the allegations of Dangote against Ahmed may not get the attention and seriousness it deserves from the government and he may not be punished. For them, Dangote’s revelation is mere grandstanding, and he will sheath his sword once he gets what he wants, which is either to get Ahmed sacked or stop NMDPRA issuance of fuel importation licenses.
On Wednesday, Dangote came out on top in his battle with Ahmed and partly got what he wanted, some will say. While the debates and controversy engendered by Dangote’s allegation of corruption against Ahmed dominate public discourse, news filtered through that the NMDPRA boss had resigned. While his resignation is commendable, it is not enough. Relevant government agencies must now step in to investigate the corruption allegation levelled against him. Dangote has already initiated that process by submitting a petition to the ICPC.
Of course, Nigerians are fully aware that Dangote’s decision to step into the mud, remove his gloves and fight the oil cabal to a standstill is not so much about them or their interest as it is about him and the survival of his billion-dollar business, and that is fine by them. If it is going to take a perennially favoured capitalist, an admittedly industrious, resourceful, visionary and productive one, to bring down a bigger, diabolically corrupt and protected public official, then so be it. What matters here is that the augean stable of dirty and viciously unscrupulous public officials is being cleaned.
Dangote is an unassuming, suave, soft-spoken gentleman, but his types are ferocious and unforgiving fighters who can trap and hoodwink foes and traducers with their affable, good-natured, and amiable dispositions. Obviously, he is not at his current powerful and affluent station in life by being a lily-livered, pusillanimous and trouble-avoiding character or a brawl-avoiding gentleman. You may view him with scorn and cast aspersions against his person, but one thing you cannot be found doing is to underestimate him. That, you will pay dearly for.
While we laud Dangote for standing up to perverse elements in the nation’s most significant and lucrative sector, we must not lose sight of what his own agenda is and what that portends for the nation. While his vehement opposition to fuel importation is reasonable and understandable, it is not in the interest of Nigerians for him to be the sole refiner of petroleum products in the country. This gives him exclusive power and right over the pricing of these essential products, hence creating a monopoly. This robs consumers of choices which negates the main goal of deregulating the market.
While keeping in place a questionable fuel import regime that further weakens the naira and burdens the economy is bad for Nigeria, eliminating fuel importation without practical and workable alternatives also places a huge strain on the consumers and leaves them at the mercy of Dangote, who can then gouge prices. It behoves the government to keep the market competitive and offer Nigerians choices without, whether knowingly or unknowingly, undermining or frustrating Dangote’s refinery through the issuance of fuel import licences to politically connected persons and friends of the establishment. This can be done through fixing the moribund and long-neglected government-owned refineries.
The government should also issue a licence to people ready to build refineries in the country and give them all the support they need. Lastly, the government must create a feedstock of crude oil for local refiners, which makes local crude oil readily available for them to refine instead of buying from overseas, which is what the Dangote refinery currently does. This eats into its bottom line and makes it difficult to sell refined petroleum products to Nigerians at an affordable rate.
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