Victor EzejaNigerians have reacted to the demand by the Nigeria National Petroleum Company Limited (NNPCL) to have a permanent presence at the Dangote Refinery in Lagos, as part of a proposed crude oil supply deal.
They expressed misgivings about the new arrangement between NNPCL and Dangote Refinery, raising concerns that it might hamper the efficiency of the $20 billion refinery.
Join our WhatsApp ChannelPrime Business Africa reports that Vice President of Dangote Industries Limited, Devakumar Edwin, on Thursday, disclosed that a part of the agreements reached with NNPCL so far is for the national oil company to deploy its permanent monitoring team at the facility.
“NNPC has informed us that they intend to station a team of 6 to 10 people permanently at our refinery. They’ve asked us to provide office space for them since they will be supplying the crude, overseeing the production, and buying back the products in naira,” Edwin said on an X Space hosted by Nairametrics on Thursday.
Prime Business Africa had reported that the Dangote Refinery announced its readiness to hit the market with its petrol products. It said issues of pricing and distribution were being finalised with the NNPCL.
Edwin also stated that President of Dangote Group, Aliko Dangote, has accepted that refined petrol from the 650,000 barrels per day refinery would be sold in Nigeria’s local currency, the naira, as part of the agreements reached with the NNPCL, while the national oil company also sells crude oil to them in naira.
During the virtual discussion, Edwin said NNPCL informed the management of the Dangote Refinery that the national oil company’s team would be overseeing the production and buying back the products in naira since it would be supplying the crude.
He added that the request aligns with the NNPC’s aim to closely monitor the entire process, ensuring consistent crude supply and efficient processing while securing a steady distribution of petrol across the country.
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Edwin said Dangote agreed to sell the refinery’s products in naira against the company’s earlier business model of a free trade zone, and not minding the consequences in terms of losses as he is more concerned about resolving Nigeria’s foreign exchange problem given the persistent depreciation of naira’s value.
According to him, “Dangote intervened and said: ‘We are going to accept this because the country desperately needs foreign exchange, and the value of the naira is deteriorating every day. I understand that I am going to take a loss – because, by the time we sell the product and convert it to dollars, the exchange rate may have worsened.”
On pricing mechanism for crude in terms of determining appropriate exchange rate for the naira, the Dangote Industries vice president noted that there are ongoing negotiations in that aspect yet to be finalised.
“We are still in talks with the government about receiving crude in naira. The discussions are ongoing, and nothing has been finalised yet. Some unresolved issues include the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the naira,” he said.
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Reacting to the agreement on having NNPCL permanent presence at the Dangote Refinery, some netizens said NNPCL has not demonstrated capacity and integrity to run refineries for over four decades of its existence and should not be entrusted with overseeing production at the Dangote facility.
“A hard NO for me! NNPC has demonstrated neither the capacity nor the integrity to run refineries – 4 refineries – since its inception in 1977. In fact, NNPC is currently stationed at all the 4 aground and nonfunctional refineries with increasing turnaround maintenance costs. Please do not indulge in any effort that will sabotage Nigeria’s economy and interests and benefit a few criminals whose imbecility has caused this country insecurity and poverty,” an X user, Evaristus Odinikaeze with handle @odinikaeze stated.
“A known virus wants a permanent place on your AVD to oversee deployment, management, and updates on machine workloads. What is the end-user benefit of this configuration?,” Akogun New York with handle @RareTega stated.
Another X user Ebere Anosike with handle @Njacoach queried: “How would an entity that has conflict of interest be allowed to be part of a refinery it has done everything to sabotage?” He also listed NNPCL’s past failures, which according to him, include: inability to maintain four refineries, squandering trillions of naira on turn around maintenance (TAM) yet nothing to show for it. Anosike added that all NNPCL needs from Dangote Refinery is at best, data on production. “Do not allow them near your refinery. That type of fire that happened recently that made them postpone PHC Refinery coming back on might start from the office you allocate to them. NNPC is, at best, a criminal enterprise,” he alleged.
“NNPC should not be allowed to oversee production of petroleum products from the 450,000 bbd delivery to them. No production business entity with best practices will accept production models suggested by NNPC,” Clement Edega Agege @clemagege also wrote on X.
While some accused NNPCL of attempting to spy on the Dangote Refinery, and that the arrangement is a grand plan to “suffocate” the facility, others alleged that the national oil company would rather push the refinery to export its product to other countries than allow Nigerians to buy cheaper fuel.
Another X user by name Nze Maddox raised concerns about the impact of the arrangement on free market economy principle.
“What sort of arrangement is that? Why are they attacking a free market economy. What are they there to do? To infect Dangote Refinery with the PH and Kaduna Refinery Virus,” he stated.
Another X user observed that the Dangote versus NNPCL saga reflects the challenges that private business owners in Nigeria endure to operate.
However, some netizens expressed optimism that despite the hurdles, the Dangote Refinery will emerge successful to solve the energy needs of the people and contribute significantly to the nation’s economy.
“Aliko is a tenacious businessman, no matter the shenanigans in shackling the operations of this refinery by NNPCL working with the dictate of Mr President, must realise that this products affect the lives of Nigerians and it will play a part in 2027 elections,” a political economist, Prof Imonokha Enakhena, stated.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
