Can Dangote Survive The Slippery Oil Sector ?
Until recently, Alhaji Aliko Dangote has always enjoyed every government in power. As a matter of fact, he enjoyed a lot of free excise duties under the immediate past administration of President Muhammadu Buhari, which did not only boost his business but also help him to monopolise some sectors of the economy.
Under Buhari he had a pact with the Nigerian National Petroleum Company Limited, NNPCl where it was declared that the company owned 20 per cent share of the Dangote Refinery.
However this year, Dangote refuted the claim saying that the NNPCl only owned about seven per cent and not 20 per cent as earlier stated.
Under Buhari, it was reported that the NNPCL would supply Dangote with crude oil, which would be refined and sold to the citizens and also exported.
However, things have since changed with President Bola Ahmed Tinubu inaugurated NNPCL board that is now asking Dangote to get ready for real competion.
The Petroleum Industry law that licensed NNPC to NNPCl gives it the power to partner with foreign companies to exploit Nigerian oil, some of which are now competitors with Dangote.
NNPCl standing as a PLC has reduced the powers of any president to remove its Chief Executive, Mele Kyari, even when it is clear that the board of NNPCl led by Dr. Pius Akinyelure is dancing to the tune of its partners abroad.
Dangote should begin to think beyond Nigeria as an oil refiner. His recent outburst for me is due to his inability to capture Nigeria’s oil market as he did in other sectors of which he had monopolized.
That NNPCl should come and buy his refinery is a statement of frustration due to his own mindset of depending more on Nigeria’s crude. He should realise that Nigeria’s crude oil is just one out of many that he can refine and sell.
And if NNPCl decides not to do business with Dangote Refinery , the company should not blink, rather he should show that he can operate without Nigeria’s crude oil.
Let Dangote compete with other foreign companies that are NNPCl partners and let’s see how it goes.
In the last one week, it has been accusation and counter accusation between Dangote and NNPCl over the quality of fuel being produced by the Dangote Refinery.
Early July, Dangote accused NNPCl of importing bad fuel to the country but NNPCl countered, saying that product from Dangote Refinery is inferior to that from foreign companies.
According to the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Ahmed Farouk, Nigeria will continue to import fuel because Dangote Refinery produces inferior product.
With this import by the NMDPRA, it is obvious that the NNPCl is not ready to spoon feed Dangote Refinery but will expect it to compete with its foreign partners.
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