Topic: Dangote refinery investment crisis; can the FG manage the refinery? (Read 101 times)

understand that no business minded person that's in the calibars of dangote and that has the financial capacity and influence dangote has wouldn't venture into the refinery sector knowing that a country as Nigeria that's blessed with abundant oil as her natural resources doesn't have a functional refinary in her nation. He's an entrepreneur and saw the opportunity and immediately leveraged on it. You don't expect him to back down just because his friends adviced him to do so. In a functional environment where things thrive well, the dangote refinary is a well calculated business venture that should never fail or suffer any form of loss.

Except your suggestion is that he should have liased with the government and reach an agreement with them that he would help bring back the dilapidated refinaries back to life and when it starts working, he will then become a share holder of the company which should have reduce cost and his level of exposure to all the risk involved in building a fresh refinary. If that was the case, with a combined effort from him and the federal government and as long he remains in good term with the federal government, it should have helped the nation bounce back easily and saved him from all these lack of support from the aspect of the government.

Before one is able to answer this question of yours, which is crucial at this time, you will also need to ask questions such as what were the initial idea or reasons that influenced Dangote to go into the oil and gas sector and forge ahead to build the largest crude oil refinery in Africa. If you remember, he also mentioned that while he was planning to invest heavily in his refinery, he had billionaire friends who cautioned him not to go into the sector by investing in building such refinery. But he didn't burge, rather he went ahead to build the refinery to what it is today. One would wonder why he continued and invested so much into the refinery amidst the advise he got from his friends?

The oil and gas sector in Nigeria is one industry that have been heavily populated by corrupt individuals making sheddy deals and decisions for the country for decades now. The exportation of crude oil and importation of refined oil is one wrong business decision the country have not been able to address for decades now. How can a country be so rich in crude oil products but all it's refineries have been down and out of function when the country is begging to survive on high level of increased fuel pump prices in the country.

What will it take for the government to fix the refineries in Delta, Rivers and Kaduna to be able to refine a good percentage of the crude oil taken out of the country for refining. When you combine those three refineries, it is not up to half of the over 1.2 million barrels of crude oil produced by Nigeria per day. Why can't the country establish various modular refineries that can refine our crude oil for domestic use.


While the Dangote refinery have all it takes to lift Nigerians from the long time Socio-economic suffering that we are facing including increasing fuel pump prices, removal of fuel subsidy, hike in transport fare, the increase in the commodity market, the insecurity and the excessive lost of revenue in the oil and gas sector due to the exportation of the crude oil that can be refined in Nigeria through the Dangote refinery, I don't think it's his generosity that brought about the idea of building the refinery, rather I think he wants to spread his tentacles to the oil sector and he's trying to monopolize the market by having the largest crude oil refinery in Africa with the capacity of refining close to half of what we produce a day.

The reason why I said this is stemmed to these reasons;

1. The Dangote-Bua fued: BUA Group who are another industry leader in the commodity market including Sugar and Cement industries came out on social media to accuse the Dangote Group of its pressure to bring down their investments in those industry to remain at the top. They also accused the Dangote Group of being spoon-fed by the government to get their ways in monopolizing the market. In another claim, the Bua Group accused the Dangote Group of trying to bring them down for almost 30 years since they joined the market and that their own reasons for coming into the trade is to create a competitive market that the people can benefit and enjoy.

2. The Dangote's monopolistic trajectory: the Dangote group have claimed, during a media battled between them and BUA group, that they control 70% of the cement market and won't be letting that go anytime, in another article online by Premium Times mentioned that Dangote went to the cement industry to dominate and monopolize the market thereby giving a fall to other thriving cement companies like Ibeto Cement at a time. We've also seen where Dangote came out recently to scrap his investment plan into the steel industry over the monopoly accusations leveled against him.


Well, the cabals in the oil and gas industry will have a large share of determining that. But the government have the ultimate responsibility to determine whether Dangote refinery will thrive or not. I know the cabals are scared of the monolopy likely to come to the market and how they may not benefit from their juicy sheddy deals from the local refinery. But that left some asking whether Nigerians prefer to have foreign or local monolopy. The good thing is companies like the BUA Group have also tried to establish a 200,000bpd capacity of oil refinery in Akwa Ibom too. Another good news is that the president have also ordered NNPCL to sell crude to Dangote Refinery in Naira.

This means that Dangote Refinery won't have to go to Brazil to get its product to run its operations which may not be sustainable. If that happens, the refinery will be able to supply Nigerians will refined oil for our consumption and there would be little or no need to import refined oil for consumption. Also, when the BUA Refinery also starts operating, Nigeria will have enough fuel and the competition in the market will increase. By the time other modular refineries also come into the market, our naira will gain a very strong value in the international trade market and Nigerians will see a great decrease in hike of fuel and commodities.

I've long time knew about this, as a matter of fact I did a personal investigation about the happenings in NNPC. The cabals will fight tooth and nail to make sure no product is refined and sold in Nigeria.
If Nigeria's are getting to know about this obvious fact now then that means they are coming to a party that is already over.

That allegation the government is accusing Dangote of refining products with high sulphur and that the product is inferior, goes to show you how dirty the government is ready to fight anybody they perceive as a treat, even the house of representative members that came to the refinery to see things for themselves where asked to take a sample of the product and go and test it in any lab of their choice to see if there is a high sulphur  content or any impurities, up till now we've not seen anything from them, the only breaking news we saw was an offer from the Federal government to buy off the refinery from Dangote. Trust me even though the government succeed in buying it, they will still run it aground just the way they've been running the other three.

Is it not clear enough that the leaders do not want any refinery to function? It is very obvious and clear now to Nigerians. They have four refineries and non is working. They prefer to import refined crude oil from outside Nigeria. Dangote refinery is bigger than their four refineries and they see it as threat. They do not want this country to be good.

Government official accused Dangote refinery oil to have high sulphur and inferior to the world standard. Also accused Dangote is likely trying to monopolize the oil sectors. Is that not an enemy of progress (I mean the government official)? It was said that Nigeria does not have the laboratory to test if the refined products are inferior or not. This is an accusation without any evidence.

Dangote group of company was looking into steel industry before, but Dangote said the board members said they are not going into it again because of the accusation. Dangote built a refinery and importing crude oil from outside Nigeria. This was when I have known that something was going wrong when he was unable to pay the Chinese carrier that shipped the crude oil from the United States.

Let our government continue to deceive us.

It's really a discussion that has a lot to do with our current economic situation in the country especially as we face the extremely high level of fuel pump price we're experiencing. It is really impacted negatively on the lives of our people because of the adverse effects it poised on the commodities in the market. Makes it a key aspect of interest and discussion.


On one hand, I pity the Nigerian people including the owner of the Dangote refinery who just spent multiple billions of naira to construct one of the largest single refineries in the world with over 600,000 barrels of oil capacity. On the other hand, the cabals in the oil industry have seen the coming of Dangote to the industry as a threat to their shady deals therefore they won't want him to hold his ground because of his track record of dominating major markets he joined.

I wanted to write about this pressing issue and then I came across this. I believe majority of us are not paying attention to this issue or probably do not know why Dangote is facing backlash with his multi billion dollars refinery. It's a topic worthy of discussion because it deals exclusively with our economy.

It's sad to see that our government is frustrating Dangote effort to start operating his oil refinary simply because they chose politics over our economic improvement. Dangote has actually enjoyed preferential treatment from previous governments because of his close tie with them.

To this government, their idea is a reflection of  capitalism where the economy is driven by profit maximization. Tinubu is a capitalist and he understands the tenet of a free market economy including allowing competition. Unfortunately, Dangote does not seem to have a close relationship with the present administration. Nigeria is just like united state of America that focus more on political power than having sole interest in the economy like China.

The success of this refinery would contribute to our socioeconomic growth and our overall GDP. Issues like this are the reason why many foreign companies find it difficult to invest in Nigeria and the home companies failed to thrive while the few ones operating are dancing to government tune.

My concern is if the government frustrates their own indigenous investor like Dangote, what message does that send to other foreign investors attempting to come and invest here?

It appears as though the economy isn't affecting only the ordinary citizens online, the president of the dangote group has just made an offer to sell the Dangote Refinery to the NNPC. according to the statement from dangote,

“As you probably know, I am 67 years old, in less than three years, I will be 70. I need very little to live the rest of my life. I can’t take the refinery or any other property or asset to my grave. Everything I do is in the interest of my country. “This refinery can help in resolving the problem but it does appear some people are uncomfortable that I am in the picture. So I am ready to let go, let the NNPC buy me out, run the refinery. At least the country will have high-quality products and create jobs,”

This ordinarily should have been a good news but then, it raises some questions and possibilities;

1. Is it possible that dangote is not getting the expected returns from his investment in the refinery sector and wants to sell it out to the government now that it's not yet obvious that the company isn't able to to be sustainable in the long run.

2. Is it that He's just ready to be generous to his nation and reduce his monopolistic influence from the petroleum sector? If this is true, can the NNPC effectively take care of refinery  knowing fully well that we have  non functional refinaries under the watch of the federal government that is still struggling?

3 should the dangote refinery become non functional in time to come, what would be the effect on the availability of fuel and other petroleum product in the country considering the fact that even at this time, we're still struggling with the issue of fuel sufficiency.

Let's talk.