November 17, (THEWILL) – With the calming of nerves between Dangote Refinery and the behemoth Nigerian National Petroleum Company Limited (NNPCL), the nation can now relax over the anxiety that unending scarcity of petrol creates. While the pump price remains high to the detriment of the people and businesses, the availability of the commodity provides some comfort.
It has been a turbulent moment for Dangote Refinery which the world had expected would finally nail the coffin on petrol importation in Nigeria.
From open confrontation against the emergence of the $20 billion domestic facility to a surreptitiously organised betrayal by the authorities, a deal has finally been reached after the confusion about the role of NNPC in the distribution of Dangote petroleum products created.
Going by the latest development, the Independent Petroleum Marketers Association of Nigeria (IPMAN) can now lift petrol direct from Dangote Refinery and sell as the market forces would determine.
What does all this imply? Nigeria is allergic to functional refinery. Importation of petroleum product seems to be in the DNA of the system where corruption holds sway. That is why it is uncertain whether the country has really ended the importation of petrol.
Aliko Dangote, President of Dangote Group, will tell the story how he overcame. But the spirit of importation has not truly fled.
Culture of contradiction
After decades of massive importation of petroleum products, the NNPCL on November 11, announced that it had finally ended the age-long practice.
The development which is expected to save Nigeria as much as $10 billion in hard currency in-country annually, came as the national oil company said it now buys from the 650,000 barrels per day Dangote Petroleum Refinery located in Lagos.
Group Chief Executive Officer of NNPCL, Mr. Mele Kyari, disclosed this in Lagos, while delivering his keynote message at the recently concluded 42nd annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE).
The announcement came amid another cheery news by IPMAN that it had struck a deal to buy products directly from the $20 billion Dangote facility.
The previous arrangement was for the independent marketers to buy from the NNPC and not from the Dangote Refinery, a practice the oil sellers had vehemently opposed.
Three days later, the NNPCL made a U-turn by saying that it has not stopped the importation of petroleum products into the country.
NNPC spokesperson, Olufemi Soneye, disclosed this in a statement on Thursday.
Soneye said the state-owned petroleum company would still source for products from outside the country when there is a need for that.
Soneye confirmed that the Group Chief Executive Officer of the NNPC, Mele Kyari, said at the Nigerian Association of Petroleum Explorationists conference that the company is not importing fuel anymore but taking from local refineries – a statement that totally contradicted Kyari’s announcement.
In all dimensions, the development poses great danger to Dangote because the nation is allergic to a functional refinery; that is why the four NNPC refineries have remained dormant for about three decades and may not be revived in the nearest future.
With the coming of Dangote Refinery, the question has been what will be the fate of the four NNPC refineries that have been moribund for close to three decades, yet consuming huge resources in endless repairs? Of course, the facilities may become relics of resource-gulping national assets that will ultimately go into oblivion.
That also may mark the end of an era of contradiction in the behemoth national oil company that has enjoyed everything but reputation for a culture of good corporate governance.
The latest announcement by the NNPC to concession the Warri and Kaduna refineries to private companies for operation and maintenance underscores this point.
In an apparent state of bewilderment stemming from what stakeholders and industry experts ascribed to ineptitude and corruption, the NNPCL made a detour on the endless route towards fixing the nation’s dormant refineries which are said to have consumed over N10 trillion without producing a drop of petroleum products.
It is on record that the nation’s oil company had in the last 12 years embarked on the turnaround maintenance of the four refineries – in Port Harcourt (two plants), Warri and Kaduna – with countless promises of fixing the facilities to end the notorious practice of importation of petroleum products.
However, in a dramatic turn of events, the NNPCL on August 30, 2024 announced that it was seeking private Operations and Maintenance (O&M) companies to bid for the Warri and Kaduna refineries (while repairs of the Port Harcourt refinery is in progress).
“NNPC Ltd is seeking to engage reputable and credible Operations & Maintenance (O&M) companies to operate and maintain two of its refineries, Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and Petrochemical Company (KRPC), to ensure reliability and sustainability to meet the nation’s fuel supply and energy security obligations,” the company said in a circular.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
