Buyers Wanted: Dangote Offers To Sell Refinery, Asks NNPC To Buy Him Out

Buyers Wanted: Dangote Offers To Sell Refinery, Asks NNPC To Buy Him Out

Monday, July 22, 2024, at 6:49 AM by Pascal Oparada

Aliko Dangote, the President of Dangote Industries Limited, has asked the Nigerian National Petroleum Company Limited (NNPC) to buy him out of his refinery. This offer comes amid a dispute with the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over the sulphur content in petroleum products from the refinery. Dangote has promised that the refinery will end petrol imports and save Nigeria’s hard-earned foreign exchange.

Dangote Invites NNPC to Acquire His Refinery

Dangote has expressed readiness to relinquish ownership of the world’s largest refinery to NNPC. Speaking amid a new dispute over the sulphur content of petroleum products produced from the refinery and a misunderstanding with NNPC, one of the refinery’s key equity partners, and the NMDPRA, Dangote highlighted the benefits the refinery offers. The refinery, commissioned by former President Muhammadu Buhari, is estimated to have cost about $20 billion. It aims to end Nigeria’s dependence on petrol imports and save about 30% of the total foreign exchange spent on imports.

The Chairman of the Dangote Group asked NNPC to buy him out and manage the refinery, noting that he has been labeled a monopolist. Africa’s richest man pointed out that Nigeria has faced a fuel crisis since the 1970s, and his refinery can help resolve this issue. He added that some people seem uncomfortable with the refinery’s operations.

Premium Times reports that Dangote’s bet on oil and gas is becoming challenging in its early days. The refinery is set to begin selling petrol to the Nigerian market in early August after operating above half its capacity since January 2024, when it began refining petroleum products.

Dangote Resorts to Importing Petrol

Dangote lamented the difficulty of sourcing crude oil, stating that international oil companies (IOCs) are demanding outrageous premiums and sometimes claim the product is unavailable. According to reports, the NNPC had delivered only 6.9 million barrels of crude oil to the refinery as of May 2023. The NNPC has a deal with the company dating back to the beginning of operations. Earlier, the company agreed to a 20% equity participation. The Dangote refinery has revealed that NNPC has only paid 7.2% before the deadline issued to the national oil firm.

Dangote Speaks on the Future of His Proposed Steel Company

Legit.ng earlier reported that Aliko Dangote, President of the Dangote Group, has said the group will no longer invest in Nigeria’s steel industry to avoid the monopoly label. The Nigerian billionaire disclosed this on Saturday, July 20, 2024, stating that the allegations of trying to monopolize businesses in Nigeria have become a significant discouragement.

On Thursday, July 18, 2024, the chief executive of NMDPRA, Farouk Ahmed, said that the Nigerian government will not end the importation of petroleum products, asserting that it cannot rely solely on the Dangote Refinery to meet the country’s needs.