Obasanjo Warns of Sabotage Threats to Dangote Refinery

Former President Olusegun Obasanjo has raised alarms about potential efforts to undermine the Dangote Petroleum Refinery. Speaking on the matter, Obasanjo suggested that entrenched interests benefiting from Nigeria’s lucrative fuel importation business may seek to frustrate the refinery’s operations. Alhaji Aliko Dangote, the President of the Dangote Group, had earlier accused certain ‘mafias’ of attempting to sabotage his $20 billion refinery project. The refinery has yet to begin purchasing crude oil in naira, despite President Bola Tinubu’s directive for the Nigerian National Petroleum Company Limited (NNPC) to do so.

In an interview with the Financial Times, Obasanjo emphasized the potential positive impact of a successful refinery on investment in Nigeria. “Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria,” he said. However, he warned, “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.”

Allegations and Denials Amidst Regulatory Challenges

The Dangote Group has recently voiced concerns that international oil companies are obstructing the refinery’s progress by either refusing to sell crude or charging exorbitant prices above the standard rate. Furthermore, the group has accused the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) of issuing licenses for the importation of contaminated fuel, exacerbating operational challenges.

In response, the NMDPRA denied these allegations, countering that Dangote’s diesel quality was inferior compared to imported products. Farouk Ahmed, the NMDPRA Chief Executive, stated that to avoid creating a monopoly by the Dangote Group, the country would not halt fuel importation. This regulatory stance underscores the complexities and competitive tensions within Nigeria’s petroleum sector.

Crude Oil Purchases in Naira: A Pending Directive

Despite a directive from President Bola Tinubu for the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to local refineries, including Dangote’s, in naira, there has been no implementation. The Crude Oil Refiners Association of Nigeria revealed that while letters have been sent to the NNPC requesting crude supply, there has been no response. This directive was intended to provide 450,000 barrels for domestic consumption in naira, with the Dangote refinery as a pilot project.

The delay has sparked frustration among local refiners, who argue that the move could reduce fuel costs and strengthen the naira against the dollar. “Typically, we would expect our regulator, in this instance, the NMDPRA, to kick start the process by calling for a meeting of all parties to discuss the framework for such supply or have NNPC respond to the various letters to it by the refineries requesting for crude,” said Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria. The association has also called for an executive order to enforce the directive, ensuring it is legally binding and beneficial to the Nigerian market.

Obasanjo’s Critique of Nigeria’s Economic Policies

Obasanjo did not limit his critique to the refinery issues but extended his discontent to Nigeria’s broader economic strategies. He lamented the nation’s over-reliance on oil, to the detriment of gas and agriculture. “I believe 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,” he stated, highlighting missed opportunities in diversifying the economy.

Reflecting on his presidency, Obasanjo recalled his attempts to involve Shell in managing Nigeria’s refineries, which were rebuffed due to concerns over corruption and poor maintenance. “When I was president, I invited Shell to come and take equity and run our refineries for us. They refused and said our refineries were not well maintained,” he recounted. Criticizing the government’s persistent failures to revitalize the refineries, he added, “How many times have they told us that the refineries would be fixed, and at what price? Those problems as far as the government refineries are concerned have never gone. They have even increased.”

Obasanjo also took issue with President Bola Tinubu’s abrupt removal of fuel subsidies, arguing for a more thoughtful approach to mitigate the resultant hardships. “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,” he stressed, pointing to the nuanced and ongoing challenges in Nigeria’s economic landscape.