It is befuddling to contemplate that months after the commencement of production by the Dangote Refinery we are still neither here nor there in our effort to enjoy the benefits of locally refining our God-given resource, crude oil. Only one word can best explain this conundrum, corruption.
For many years, we tried to no avail to have one functional refinery. Year after year, billions of dollars have been spent turning around and maintaining what has never been in use. Timelines and deadlines have been issued to fix at least one refinery but the brutal reality is that the refineries were never meant to work because they remain readily available conduits for siphoning public funds by the political class and their cronies.
Added to this too, is the fact that the nation deliberately refused to explore enough crude to meet both our domestic and external demands, again, no thanks to corruption.
Since building a simple plant became rocket science, we decided to display our lack of national pride and seriousness before the world by exporting our crude abroad for refining, while licences were granted to cronies and lackeys of the powers that be to import all kinds of products in the name of petroleum. That is why till this day Abuja, the seat of power, remains the biggest market in the world where import licences are freely sold and purchased on every street corner and shop.
Since this provided an easy source to fleece the nation, our fat cats in the oil Ministry and other players in the industry decided that this abnormality must subsist. It’s either importation or nothing.
That is where we are at present. We were told that the reason we have continued to pay more to enjoy our God-given resource is because we do not do local refining and that as a result we are condemned to suffering the vagaries associated with international trade and the concomitant effects associated with it, including the volatility in the exchange rate of the naira against the dollar.
Ex-President Muhammadu Buhari boasted that he would on assumption of office fix one refinery after the other. But eight years later we are still waiting for the Port Harcourt refinery. We have been told severally that it will soon resume production. As it is, this wait may take eternity. Owning a refinery does not amount to reinventing the wheels, it is simply to copy and paste.
Then came Dangote Refinery and some others, and the story still has not changed. Those who should know insist that Dangote refinery would not bring any succour after all. They tell us that the cost of importing refined petroleum products abroad and locally would not be significantly different because they are controlled by international markets. In other words, not even the removal of financing and margin costs by refining them locally will offer consumers any reprieve.
Aliko Dangote, who is now fighting for the survival of his ambitious $20 billion investment, would also not tell us what it costs to produce the product locally and at what cost he would be offering it to the off-takers or marketers.
Similarly, the marketers themselves who would not have the status quo upturned are insisting that Dangote is seeking to enjoy a monopoly and that that would not be good enough for the country. Their solution is that they should continue to import the products to avoid a possibility of leaving the nation stranded should Dangote fail to produce. What a shame!
Some marketers recently sued Dangote, insisting on petrol import.
The marketers, AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited, asked the Federal High Court in Abuja to dismiss a suit filed by Dangote Petroleum Refinery and Petrochemicals.
The marketers in a joint counter-affidavit marked: FHC/ABJ/CS/1324/2024 and dated November 5, 2024, a response to an originating summon filed by Dangote Petroleum Refinery and Petrochemicals, argued that granting the application of the refinery would spell doom for the country’s oil sector.
They emphasised that the plan to monopolise the oil sector is a recipe for disaster in the country.
Dangote refinery in its originating summon dated September 6, 2024, had sued Nigeria Midstream and Downstream Petroleum Regulatory Authority and Nigeria National Petroleum Corporation Limited, AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited as 1st to 7th defendants respectively.
Dangote prayed the court to declare that NMDPRA was in violation of Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing licences for the importation of petroleum products.
It stated that such licences should only be issued in circumstances where there is a petroleum product shortfall.
It also urged the court to declare that NMDPRA is in violation of its statutory responsibilities under the PIA for not encouraging local refineries such as the company.
Shafa, A. A. Rano, and Matrix Petroleum, however, responded that Dangote refinery does not produce adequate petroleum products for the daily consumption of Nigerians.
They noted that the plaintiff had not placed anything before the court to prove the contrary. They argued that they are well qualified and entitled to be issued an import licence by NMDPRA to import petroleum products in Nigeria within the meaning of Section 317(9) of the PIA.
They also noted that they are fully qualified for the issuance of the import licences issued to them by the 1st defendant, as they duly met all the legal requirements for the issuance of such import licences, before the same were issued to them.
“The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the plaintiff’s business or its refinery.
“The import licences issued to the defendants by the 1st defendant are in line with the provisions of the Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018, and other relevant laws,” they contended.
They insisted that giving Dangote Refinery the power of monopoly in Nigeria’s petroleum industry as it sought in the instant suit, would kill competitive pricing of petroleum products in the country.
Stressing that such an act would further deteriorate the country’s critically ailing economy.
They also added that it would “unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity.”
The marketers explained that if Nigeria puts all her energy eggs in one basket by stopping the importation of petroleum products and allowing the plaintiff to be the sole producer and supplier of petroleum products in Nigeria, with liberty to determine the prices at which it supplies the products, the prices of petroleum products will continue to rise and energy security will elude Nigeria.
They also noted that should the refinery break down being a monopolised sector, the country will be plunged into a hot mess of energy crisis.
They further told the court that granting the reliefs sought by the plaintiff was a design to leave Nigeria and Nigerians at the mercy of the plaintiff with respect to the availability and cost of purchasing petroleum products in the country.
Meanwhile, NMDPRA that first announced that Dangote products were not only substandard and its plant only 30 per cent completed, is still carrying on as though nothing has changed and has been unable to prove, as regulator, Dangote wrong in its claims of availability and sufficiency to meet local demand.
Dangote insists that the refinery had reached processing rates of about 420,000 of its installed capacity of 650,000 barrels a day of crude.
These marketers insist that allowing Dangote to enjoy monopoly is a recipe for disaster. Really?
They argued that allowing importation would guarantee sufficiency and availability. They also claim that this would also allow for competitive pricing of the products.
But are these marketers saying in all these years of importation we have not been witnessing scarcity? Were these marketers not holding the nation to ransom, especially during the subsidy regime? Were oil marketers not fleecing the nation demanding payment for imports not made.
The way forward for a serious, progressive and futuristic Nigeria is to immediately halt all importation of refined products. The real competition to provide for Dangote is to boost all private operators and make the national refineries functional and operational.
That way, our refineries would not only work and provide more jobs for the people but also help to preserve our ever-dwindling scarce foreign exchange.
Our continued importation of refined products is symptomatic of a failed nation and people. How does it sound to hear that whereas some smaller nations without crude oil own functional refineries while we, a major producer of crude oil, cannot boast of an operational refinery?
Therefore, Dangote, with all his shortcomings has come to save us from what is a national blush.
Thankfully, the Independent Petroleum Marketers Association of Nigeria has secured an agreement with Dangote to lift products directly.
This, according to the association, will ensure the availability of petroleum to Nigerians at a cheaper rate.
IPMAN’s National President, Abubakar Garima, explained that the Dangote refinery had obliged IPMAN to lift PMS, AGO and DPK directly for onward supply to IPMAN depots and retail outlets. With this new arrangement with Dangote, he said, the refinery would ensure a steady and ceaseless supply of PMS products all over Nigeria at an affordable rate.
Let it be told that the real doom to be spelt in all capitals for the country is to continue to encourage importation as that is the only reason our national refineries will never work. The greatest disaster that happened to this nation is the current opaque operations in that sector, where a few would be helping themselves to our collective patrimony at expense of the majority of the citizens.
The biggest monopoly is that enjoyed by these marketers who jointly and in cohorts held this nation by the jugular all these years.
Favouring Dangote and other local refineries is at the core of the very essence of backward integration, building local capacity as well as achieving self-sufficiency, self-reliance and economic growth. That is what we desire not perpetuity in import dependence which kills local enterprises and stifles growth. These are the real recipes for disaster.
