Nigerians had high hopes when the long-awaited Dangote Refinery finally rolled out its first batch of petrol, hoping it would mark the end of expensive fuel and bring relief to consumers. However, those hopes were quickly dashed when the Nigerian National Petroleum Corporation Limited (NNPCL), the initial off-taker of the product, announced that it bought the fuel at a staggering N898 per litre. After adding statutory charges and other costs, the price was set between N950 and N1,100 per litre, depending on the region.
This left many Nigerians in disbelief, as the initial price promised by Alhaji Aliko Dangote had led many to expect more affordable fuel. Worse still, the NNPC’s buying price was even higher than the N850/litre prevailing in the market before the refinery’s rollout, a price that had been attributed to scarcity.
To the public’s surprise, Dangote Refinery swiftly refuted the NNPC’s statement, insisting that it had sold the fuel in dollars and accusing the corporation of misleading the public. However, the refinery did not disclose the dollar amount, nor did it explain how much the final cost would be once converted to naira. This raised concerns about whether NNPC had inflated the price when converting from dollars to naira, given that it would ultimately sell the fuel in naira.
Dangote’s rebuttal went further, describing the NNPC’s disclosure as mischievous and malicious,designed to undermine the achievements of the refinery in addressing Nigeria’s energy challenges. The refinery also claimed that the deal with NNPC had resulted in significant savings.
The refinery's statement sowed confusion and fueled suspicions. Many Nigerians, including some high-profile figures, began to wonder if the NNPC was standing in the way of more affordable fuel prices. These suspicions led to calls for NNPC to renounce its status as the sole off-taker, allowing other buyers, such as major marketers and independent marketers, to purchase directly from Dangote Refinery. It was hoped that such competition would lead to more favorable pricing.
In a bid to clear its name, NNPC welcomed the idea of allowing other buyers to lift fuel from Dangote Refinery. Soon after, the refinery began selling fuel to major marketers at a reduced price of N766/litre significantly lower than what it had charged NNPC. While independent marketers have yet to finalize their own negotiations with the refinery, this development has raised hopes that competition may drive down prices.
However, even the new price of N766/litre, once additional costs are factored in, is unlikely to bring the relief Nigerians had hoped for. The situation is particularly difficult for ordinary citizens, who have come to rely on petrol for powering small businesses due to the country’s unreliable electricity supply. The soaring prices leave them in a worse position than before the refinery’s launch.
Some industry experts had warned that Nigerians were expecting too much from the Dangote Refinery, especially given the complex dynamics of fuel pricing. Still, many preferred to listen to Dangote himself, who had publicly boasted that his refinery would solve Nigeria’s twin problems of fuel availability and affordability once it became operational.
Since the rollout, Dangote has remained silent on the matter, leaving many to question why the situation turned out this way. Should Nigerians expect some form of relief as other factors, such as the government’s push for local refiners to buy crude oil in naira, come into play? The government hopes that easing production challenges will lead to more competitive prices, but for now, relief seems elusive.
For some, Dangote’s behavior is not surprising. Though widely regarded as a philanthropist, Dangote is first and foremost a businessman, and he has shown a willingness to build monopolies in industries like cement and sugar. In these sectors, prices have remained high despite government interventions aimed at reducing them.
Critics argue that Dangote’s influence is so strong that he often edges out competitors, gaining control of entire markets. While this fear may seem far fetched in the oil and gas sector, which is heavily regulated, it has led to calls for greater oversight and vigilance to ensure no single player monopolizes the industry.
The oil and gas industry is critical to Nigeria’s economy, and it is constantly under government scrutiny. While it is unlikely that Dangote would be able to create a monopoly in this highly competitive sector, the government must remain vigilant. There is concern that Dangote’s influence could grow unchecked, especially with his close ties to successive governments.
The Tinubu administration, like those before it, has shown a willingness to support Dangote’s business ventures, granting him significant leeway in the oil sector. For instance, NNPC has agreed to supply Dangote Refinery with 385,000 barrels of crude oil per day nearly the entire volume of crude oil currently accruing to the federal government from its joint ventures with international oil companies (IOCs).
This substantial allocation of crude oil raised eyebrows, as some had believed it would be impossible to secure such a large quantity. However, the government managed to do so after Dangote accused several stakeholders of attempting to sabotage his refinery.
Given how much the government has supported Dangote’s businesses, many believe it is time for the billionaire to give back to the nation. He is in a unique position to help ease the country’s fuel crisis by making his products more affordable, but for now, it seems his focus remains on protecting his business interests.
There is still hope that Dangote will honor his commitments and increase fuel supply to the market, but the challenges facing his refinery including ongoing infrastructure development are slowing progress. Meanwhile, the refinery has yet to meet its target of delivering 25 million litres of fuel daily, leaving Nigerians frustrated and skeptical.
As Nigeria navigates its current fuel crisis, all eyes will be on NNPC and regulatory agencies in the oil sector. The crude for naira policy, which aims to support local refiners and create a more sustainable environment, must be closely monitored to ensure it delivers the desired results. If successful, it could help stabilize fuel prices and increase export earnings.
At the same time, Dangote Refinery must be held accountable for its role in the market. The government and its agencies must engage the refinery’s management to ensure transparency and fairness in pricing. For now, Nigerians wait anxiously for the relief they were promised.