google.com, pub-3998556743903564, DIRECT, f08c47fec0942fa0 Why Fuel Importers Will Frustrate Dangote – Obasanjo

Why Fuel Importers Will Frustrate Dangote – Obasanjo

Former President Olusegun Obasanjo has expressed concerns about potential efforts to undermine the Dangote Petroleum Refinery, spearheaded by individuals benefiting from Nigeria’s lucrative fuel importation business. 

These remarks were made in the context of allegations by Alhaji Aliko Dangote, President of the Dangote Group, who claimed that certain 'mafias' are attempting to sabotage the $20 billion refinery project.

During an interview with the Financial Times, Obasanjo lauded Dangote's refinery as a significant investment that should inspire both local and international confidence in Nigeria’s economic potential. 

However, he noted that those profiting from the status quo of refined product imports might resist this change to protect their interests. "If those who are selling or supplying refined products for Nigeria feel that they will lose the lucrative opportunity, they will also make every effort to get him frustrated," Obasanjo stated.

Obasanjo also reflected on Nigeria’s historical economic missteps, emphasizing the nation's over-reliance on oil while neglecting other vital sectors such as gas and agriculture. He recounted his attempts to involve Shell in managing Nigeria's refineries during his presidency, which the oil company declined due to concerns over corruption and poor maintenance practices.

Meanwhile, the Dangote Group has recently raised alarms over the obstacles posed by international oil companies (IOCs). The group accused these companies of either refusing to sell crude oil to the refinery or charging a premium price of up to $4 above the norm. Furthermore, they alleged that the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) has been complicit by granting licenses for importing substandard fuel, a claim the regulator has denied, citing the alleged inferiority of Dangote's diesel.

NMDPRA Chief Executive, Farouk Ahmed, defended the authority’s actions, stressing that Nigeria must continue fuel importation to prevent a monopoly by the Dangote Group.

Adding to the complexity, there has been no progress on the directive from President Bola Tinubu for the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil in naira to domestic refineries, including the Dangote facility. The Crude Oil Refiners Association of Nigeria (CORAN) has reported that despite writing to the NNPC requesting crude supplies, they have yet to receive a response.

This delay follows the Federal Executive Council's recent approval to sell 450,000 barrels of crude oil meant for domestic consumption in naira, using the Dangote refinery as a pilot project. The aim is to stabilize petrol prices and strengthen the naira against the dollar.

Eche Idoko, Publicity Secretary of CORAN, has urged for immediate action, suggesting that an executive order might be necessary to enforce this directive. He noted, “Yes, we will see a rebound in the pricing of fuel once the President’s order is implemented. It must be with a force of law, either by executive order or by incorporating it into a new guideline so that the crude producers will be bound to sell to us in naira.”

Obasanjo also criticized President Tinubu’s approach to removing fuel subsidies, suggesting that the administration should have considered the potential hardships on citizens and sought ways to mitigate these impacts. "There’s a lot of work that needs to be done. Not just wake up one morning and say you removed the subsidy," Obasanjo emphasized, pointing out the inflationary pressures that have followed the subsidy removal.

Furthermore, the former President voiced concerns about youth unemployment and restiveness, warning that Nigeria is at risk of significant social unrest if these issues are not addressed. “Our youth are restive because they have no skill. They have no empowerment. They have no employment. We are all sitting on a keg of gunpowder,” he cautioned.

The Dangote refinery and other local refiners continue to face significant challenges in securing crude oil, which hampers their operations and threatens to undermine the broader goals of Nigeria’s economic diversification and industrial growth. The success of these initiatives is crucial for reducing Nigeria’s dependence on fuel imports and fostering a more self-sufficient economy.

 

 

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