Former President Olusegun Obasanjo has raised concerns over efforts by vested interests to undermine the Dangote Petroleum Refinery, citing beneficiaries of the lucrative fuel importation business as potential saboteurs.
In response to recent allegations by Alhaji Aliko Dangote, President of the Dangote Group, that certain ‘mafias’ are attempting to frustrate the $20bn refinery project, Obasanjo emphasised the importance of supporting such investments. Dangote had disclosed these challenges amid reports that the multi-billion-dollar refinery and other domestic refineries had yet to purchase crude oil in naira, despite directives from President Bola Tinubu.
In an interview with the Financial Times, Obasanjo praised the refinery as a significant investment that should inspire confidence in both local and international investors. “Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria,” he stated. “If those who are selling or supplying refined products for Nigeria feel that they will lose the lucrative opportunity, they will also make every effort to get him frustrated.”
Recently, officials of the Dangote Group accused international oil companies of obstructing the refinery by refusing to sell crude or by selling at a premium of up to $4 above the normal price. Additionally, they criticised the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) for allegedly issuing licenses for the importation of substandard fuel, a claim the regulator denied by pointing to the inferior quality of Dangote’s diesel compared to imports.
Farouk Ahmed, NMDPRA Chief Executive, asserted that Nigeria would continue importing fuel to avoid creating a monopoly for the Dangote Group.
Reflecting on Nigeria’s economic strategy, Obasanjo highlighted past mistakes, such as over-reliance on oil while neglecting gas and agriculture. “We made a very, very deadly mistake. We put all our eggs in one basket of oil. We even ignored gas. We were flaring gas, which is a very important commodity. We ignored agriculture, which should have been the centrepiece of our economic development,” he said.
Obasanjo recounted his attempts to involve Shell in managing Nigeria’s refineries during his presidency, only for the company to decline due to the sector’s corruption and poor maintenance. “When I was President, I invited Shell and said, look, come and take equity participation and run our refineries for us. They refused. They said our refineries have not been well maintained. We have brought amateurs rather than bringing professionals. They said there’s too much corruption with the way our refinery is run and maintained. And they didn’t want to get involved in such a mess.”
He also criticised President Bola Tinubu’s abrupt removal of fuel subsidies without considering the ensuing hardship on the populace. “There’s a lot of work that needs to be done. Not just wake up one morning and say you removed the subsidy. Because of inflation, the subsidy that we have removed is not gone. It has come back.”
Obasanjo underscored the necessity of fostering investor confidence and transitioning from a transactional to a transformational economy. He expressed alarm over youth unemployment and its potential for unrest, warning, “Our youth are restive. And they are restive because they have no skill. They have no empowerment. They have no employment. We are all sitting on a keg of gunpowder. And my prayer is that we will do the right thing before it’s too late.”
Meanwhile, it was revealed that the Dangote refinery and other local refineries have yet to commence purchasing crude oil from the Nigerian National Petroleum Company Limited (NNPC) in naira, despite a directive from President Tinubu. Letters requesting crude have been sent to the NNPC by individual refiners, but no responses have been received.
The Federal Executive Council recently approved President Tinubu’s proposal to sell crude to the Dangote refinery and other upcoming refineries in naira, using the Dangote refinery as a pilot. The Crude Oil Refiners Association of Nigeria has indicated that this move could reduce fuel costs and bolster the naira against the dollar. However, an executive order or new guideline is required to enforce the directive, according to the association’s spokesperson, Eche Idoko.
The Dangote Group has maintained that international oil companies continue to obstruct crude supply to its 650,000-barrel capacity refinery by insisting on selling through foreign agents at inflated prices.
