Nigeria: Dangote Tells NNPC, Oil Marketers to Stop Importing Petrol, Says Refinery Has Enough

Afreximbank

29 October 2024

Premium Times (Abuja)

By Mary Izuaka

Aliko Dangote says his refinery has more than 500 million litres of petrol in stock.

Aliko Dangote, founder and president/chief executive of the Dangote Group, says his refinery has more than 500 million litres of petrol in stock, which is more than enough to serve Nigeria if retailers buy from it.

Mr Dangote, who spoke in Abuja on Tuesday, questioned why state-owned Nigeria National Petroleum Company Limited (NNPC) and private retailers were still importing petrol when his refinery can produce enough.

"So, I am expecting that the NNPC Ltd and the marketers should stop importing; they should come and collect what they need," Mr Dangote said Tuesday.

"I don't know if you understand what it means to keep half a billion litres in our tanks; it is costing me money."

Mr Dangote did not say for how long the 500 million litres of petrol had been refined and stored by his 650,000 barrels per day refinery.

However, PREMIUM TIMES reported that data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), showed that his refinery was unable to meet the required volume of petrol sought by NNPC Ltd for three weeks.

According to the Dangote Evacuation Report seen by this newspaper, between 15 September and 5 October, the refinery delivered only 148 million litres of petrol, instead of 575 million litres.

However, speaking to State House Correspondents after a meeting with President Bola Tinubu on Tuesday, Mr Dangote explained that his refinery has sufficient petrol available, but marketers have not been picking up the product.

He emphasised that, as a producer, the refinery is not responsible for the scarcity, as it does not handle fuel distribution.

"Yes, we have enough supply of crude; we can actually produce much more than 30 million litres every day. At full capacity, we can even supply whatever is being consumed. As we speak today, we have 500 million litres, you know, in our tanks. So, with 500 million litres in our tanks, even if there's no production from anywhere or no imports, this will take the country more than 12 days, you know, with no imports, with no production, nothing.

"So we are very ready. We are more than ready. And you know, I'm also putting my own name on line by giving Mr President my word that, yes, we will be able to supply the market a minimum of 30 million per day, and we'll be ramping up production. So, we're ready. We're more than ready," Mr Dangote said.

When asked that the reality on the ground does not show that the refinery has enough petrol because there appears to be scarcity of the product, he said: "Well, one thing that you have to understand is that we are producers. I have a refinery. I'm not in the business of retail. If I'm in the business of retail then you hold me responsible.

"But what I'm saying is that the retailers should please come forward and pick, if they don't, come forward and pick, what do you want me to do? So I don't expect either NNPC or the marketers to be importing, they should come and pick because we have what they need. And you know, as they remove, I will be pumping.

"I don't know whether you understand what it takes to keep half a billion litres inside our tank. It's costing me money every day. If I will be able to collect the naira, I can actually charge somebody 32 per cent in interest. So right now, that's what I'm losing. And you are talking about 500 million, you know, I mean, we don't print money. But the issue is that if they come and collect then you will not see any queues in the filling stations.

"We have what it takes for them to come and collect. We are not retailers. We also don't have trucks to send. We have a factory, we have where they can load. If they come and pick the ones...and they have been doing that with importation. So if they've been doing that with importation, if it's true, they are doing 55 million, I see no reason why they won't come and collect our own and distribute," he added.

Dangote Refinery-NNPC Tango

In recent months, the Dangote Group has been at loggerheads with the NNPC, petroleum regulators and some private oil firms over the control of the petroleum downstream market.

In June, the Dangote Group accused some international oil companies of sabotaging the plant's operations by either refusing to supply crude or offering oil at higher premiums compared to market prices.

It also clashed with the NMDPRA, which claimed diesel from the refiner has sulphur content levels above the allowed threshold. The regulator also accused Dangote of seeking to be a monopoly.

In refuting the allegation, Mr Dangote took lawmakers visiting the refinery to a laboratory within the plant, where diesel from the refinery was tested alongside two different samples from imports.

The results showed the sample from the refinery's diesel had much lower sulphur than the imported ones.

In July, the Federal Executive Council (FEC) directed NNPC Ltd to engage Dangote refinery and other local refineries with a view to resolving the dispute over the sale of crude oil to them.

The FEC, presided over by President Bola Tinubu, also directed that such crude oil sales to the refineries be made in naira and that the refineries, located in Nigeria, should also sell their refined products to the Nigerian market in naira.

In October, the Nigerian government said it had officially commenced the sale of crude oil and refined petroleum products in Naira. The sale in Naira took effect from 1 October, the government said at the time.

PREMIUM TIMES also exclusively reported that NNPC Ltd ended its exclusive purchase agreement with Dangote Refinery, opening up the market for other marketers to buy petrol directly from the refinery.

The decision meant that the NNPC no longer act as the sole off-taker, and marketers can now negotiate prices directly with Dangote Refinery.

On 11 October, the Nigerian government confirmed NNPC's stance.

Read the original article on Premium Times.