**Dangote Offers to Relinquish Control of Refinery to NNPCL Amid Growing Tensions**
Alhaji Aliko Dangote expressed frustration on Sunday, indicating his willingness to transfer ownership of the multibillion-dollar Dangote refinery to the Nigerian National Petroleum Company Limited (NNPCL). This development follows increasing tensions between the Dangote Group and regulatory authorities in the oil and gas industry.
Concerns among Nigerians have heightened over the ongoing conflict surrounding the operations of the Dangote refinery. Dangote has accused local and foreign interests, which he termed a “mafia,” of repeatedly attempting to thwart his refinery’s completion.
Shortly after these allegations, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) claimed the Dangote Refinery was producing inferior products compared to imported ones. NMDPRA’s CEO, Farouk Ahmed, stated that the refinery’s diesel quality was 665 ppm, which he deemed substandard, cautioning that Nigeria might not rely heavily on the Dangote refinery for its fuel supply. He also mentioned that the refinery had not yet been licensed to commence operations in the country.
In an exclusive interview with PREMIUM TIMES, Africa’s richest man stated, “Let them (NNPCL) buy me out and run the refinery the best way they can. They have labeled me a monopolist. That’s an incorrect and unfair allegation, but it’s OK. If they buy me out, at least, their so-called monopolist would be out of the way.”
The 650,000 barrel-per-day Dangote refinery, which cost around $19 billion, was commissioned last year. It was seen as a promising solution to Nigeria’s heavy reliance on imported refined petroleum products, potentially saving the country about 30 percent of its foreign exchange spent on imports.
Dangote added, “We have been facing fuel crises since the 70s. This refinery can help resolve the problem, but it appears some people are uncomfortable with me being involved. So, I am ready to let go; let the NNPC buy me out and run the refinery.”
Sources revealed that the NMDPRA chief would face a House of Representatives committee to explain the contentious issues surrounding the Dangote refinery and to demonstrate that the federal government had nothing to hide regarding its success or challenges. Economic experts and stakeholders have emphasized the need for the government to support domestic refineries like Dangote’s, highlighting the potential positive impact on the economy.
Attempts to reach the Special Adviser to the President on Energy, Mrs. Olu Verheijen, for comments were unsuccessful. Queries to verify if President Bola Tinubu, the Minister of Petroleum Resources, would intervene in the dispute also went unanswered. The conflict is perceived to damage the government’s image and send negative signals to potential investors.
**The Origins of Dangote Refinery’s Troubles**
At the Afreximbank Annual Meetings in Nassau, The Bahamas, in June, Dangote mentioned that his 650,000-barrel-per-day refinery would serve as Nigeria’s strategic reserve. Subsequently, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, accused international oil companies (IOCs) in Nigeria of sabotaging the refinery’s efforts to purchase local crude by inflating prices above market rates, forcing the refinery to import crude at higher costs.
Edwin noted, “While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is trying its best to allocate crude for us, the IOCs are deliberately frustrating our efforts to buy local crude.”
The NUPRC recently met with crude oil producers and refinery owners to ensure adherence to Domestic Crude Oil Supply Obligations as mandated by the Petroleum Industry Act (PIA). The Act requires IOCs to prioritize supplying crude oil to local refineries before exporting.
In a CNN interview, Dangote stated, “The NNPC is doing its best, but some IOCs struggle to give us crude as they prefer exporting.”
**Regulatory Agencies’ Response**
NUPRC CEO Gbenga Komolafe countered the claims, stating that it was “erroneous” to say IOCs were not making crude oil available to domestic refiners. He emphasized NUPRC’s support for the Dangote refinery. Similarly, NMDPRA’s Ahmed alleged that the Dangote refinery had requested to stop giving import licenses to other marketers to monopolize fuel supply in Nigeria.
Ahmed claimed, “Currently, the quality of diesel produced by Dangote refinery is much inferior to imported quality.”
**Public Reaction to Ahmed’s Allegations**
Public responses to Ahmed’s statements were critical, with many suggesting it was a strategy to frustrate the Dangote refinery. Comments highlighted the need to promote local production and reduce reliance on imports, accusing regulatory bodies of attempting to sabotage local refineries.
**Dangote’s Challenge to Regulators**
Dangote invited regulators to test the quality of his refinery’s products, asserting that the refinery’s ppm measurement had significantly improved. He urged regulators to verify the refinery’s quality claims independently.
**Abandonment of Steel Plant Plans**
Dangote also announced halting plans for a new steel plant in Nigeria due to accusations of seeking a monopoly with his refinery. He encouraged other Nigerians with capital to invest in similar ventures.
**Expert Opinions**
Economic analysts emphasized the importance of supporting domestic refining for its positive economic impacts. They urged the government to avoid blame games and focus on rehabilitating its refineries to complement the Dangote refinery.
The ongoing dispute highlights the complexities and challenges facing Nigeria’s oil and gas sector, underscoring the need for strategic collaboration and support for local industries.
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