12/11/2024
The Dangote refinery conundrum.
By Tahir Ibrahim Tahir Talban Bauchi.
One would have thought that the whole idea of the dangote refinery was to achieve energy security for Nigeria. Years of importation of petroleum products was sabotaging the nation's growth in so many ways. Forex flight is of course number one, followed by a corruption laden subsidy regime that was draining the country's resources and emptying it into the banks of a cartel who continue to suck us dry of our commonwealth.
The elimination of subsidy has seen more resources trickle into the coffers of state and local governments. Their utilisation is topic for another day, even though the small silver lining to it is that almost all the states are embracing the new minimum wage. It is envisaged that 40% of our forex spending would be saved by the dangote refinery coming on-stream, especially with the crude for naira policy of the Federal Govt. Millions of dollars would no longer be sent abroad to the fat accounts of oil traders, to supply us petrol, diesel, and aviation fuel. However, this leg of the dangote refinery bargain is one that is proving difficult to lift off.
When Dangote was investing 20 billion dollars to build a refinery, he could only assume that he would be confronted by an array of factors like funding, construction costs, terrain challenges, technology, experts, inflation, and so on. He let the 'crazy' in him get the better of his business acumen, and went for it. Little did he know that he would be met by a totally different kind of ugly: the cartel in the oil industry and the hoops from the regulators themselves. It was one sabotage after the other.
We were made to believe his refinery wasn't ready, it was incomplete, and perhaps, lacked the capacity to give Nigerians what they'd dreamed of; the elimination of the importation of petroleum products. The 'gwo gwo ngwo' dance between dangote refinery and the regulators, and lately the marketers has shed more light on who the oil cabals are and what they are up to. They didn't want importation to end. And if it is to end, then they'd factor in their lucrative industry into the eventual cost of the locally refined product. For dangote, the enormity of his investment and it's sophistication were twin guarantees, that made sure his refinery endeavor would not flop. His products were already making waves abroad, and even European countries were lining up to buy from him. Yet the cabals were ready to set up for continued imports into the country.
However, it is more than evident to even the smallest of business minds to know that dangote fuel would be cheaper. His aviation fuel and diesel were a lot cheaper. The elimination of importation costs, and the brilliant crude for naira deal with the govt were guaranteed to give us cheaper fuel. Petrol prices had been driven off the 1000 naira mark even before dangote fuel could hit the market. Tactically, his hands were tied by the regulators.
Even when nnpcl sold at 900 naira, dangote had declared that he sold to them at a much cheaper price than the prices nnpcl were importing. The oil marketers kept flip-flopping from one position to the other. But it was clear they needed a bank facility to be able to buy from dangote in bulk, which would all be factored into costs. They were finding it difficult to deliver. From exorbitant prices to over-bloated local consumption figures, Nigerians were held to ransom by the oil cartel's manoeuvres who made sure their post subsidy business remained as lucrative as the subsidy regime.
Finally, today we hear there's a handshake between the oil marketers and the dangote refinery. They are to begin lifting from dangote refinery. The rest of the world has convinced them dangote refinery is the way to go. In all of this, my thought was that even if due to one reason or the other, dangote fuel is 50 to 100 naira more expensive, wouldn't we be proud to buy from them than import from God knows where and of what quality? Dangote refinery is a huge blessing but some were bent on making it out as a monopolistic devil. With 3 world class refinery's that went moribund in our hands for 30 years, we have the strength to call out monopoly? Where was this monopoly energy when a few enjoyed import licenses?
And still enjoy this license to the detriment of our own local industry? How are we encouraging diasporans to invest? How are we inviting foreign investments like this? Haha. In trying to fight dangote and his well thought of investment, we are blocking and canceling other new horizons. If he had built his refinery in Cotonou or Cameroon? That's right, he would have been tagged unpatriotic, after all his country has done for him! Now he has tried a little bit of patriotism, he is hit by monopolist slurs.
To the capitalist mind, the unpatriotic lot, and essentially the corrupt oil cartels, importing the same fuel that is being exported by dangote refinery is just okay. The market allows it, democracy allows it, and it's all part of competition. But to the patriotic mind and the truly Nigerian populace, having dangote refine crude and supply products for our consumption is more than a thing of pride. It gives us energy security, forex security, increases our GDP, and provides a whole lot of employment.
Afterall dangote is the single largest employer of labor aside govt. All banks in the country put together, do not pay as much tax as dangote does. Therefore I do sincerely hope and pray that the subsidy merchants will finally allow this wonderful investment to thrive locally since they've got what they want; high fuel prices at all cost!
