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I’m ready to lose money to give Nigerians cheap fuel – Dangote
Aliko Dangote, President of Dangote Industries Limited (DIL), was on Thursday, quoted to have vowed to ensure Nigerians got cheap Premium Motor Spirit (PMS), otherwise known as petrol, even if it means losing money at the end of the day.
The conglomerate is the owner of Dangote Refineries Limited (DRL), Nigeria and Africa’s first private facility and the first to be built in the continent in the last 35 years, which has now begun the refining of PMS a few weeks ago, months after it began the production of diesel.
Devakumar Edwin, Vice President, Oil and Gas of DIL, who disclosed this on Thursday, on the day he gave details on the negotiation between the DRL and the Nigerian National Petroleum Company Limited (NNPCL), on the distribution and sales of the PMS, that the company had accepted to sell the refined petrol from its 650,000 barrels per day refinery in naira, Nigeria’s local currency, as part of the particulars of the agreement.
Edwin, told participants at an X Space event hosted by ‘Nairametrics’ detailing the progress made by the refinery in the production of PMS, that the NNPC had informed the management of Dangote Group of its intention to station a team of six to 10 people permanently at the $20 billion refinery to oversee the production and buying back the products in Naira since the national oil company would be supplying the crude.
Informing that the request aligned with the NNPC’s aim to closely monitor the entire process, ensuring consistent crude supply and efficient processing while securing a steady flow of PMS for the country, he said: “NNPC has informed us that they intend to station a team of six to 10 people permanently at our refinery.
“They’ve asked us to provide office space for them since they will be supplying the crude, overseeing the production, and buying back the products in Naira. This request aligns with the NNPC’s aim to closely monitor the entire process, ensuring that crude is supplied and processed efficiently while securing a steady flow of PMS for the country.”
Providing further information on the production and commercial arrangements at the refinery, Edwin noted that the discussions with the NNPC revolved around a new model for crude supply where the refinery will buy crude from the government in Naira and sell PMS in the same currency, rather than in dollars.
Explaining part of the details of the negotiations, with critical aspects like crude pricing and the Naira exchange rate yet to be finalized, he said: “We are still in talks with the government about receiving crude in Naira. The discussions are ongoing, and nothing has been finalised yet. Some unresolved issues include the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the Naira.
“Dangote intervened and said, we are going to accept this because the country desperately needs foreign exchange, and the value of the Naira is deteriorating every day. I understand that I am going to take a loss – because, by the time we sell the product and convert it to dollars, the exchange rate may have worsened.”
Edwin also expressed frustration over the seeming boycott of Dangote Refinery’s products by local marketers, revealing that despite the refinery’s efforts to supply affordable petroleum products, many traders in Nigeria have refused to purchase from the facility, preferring to continue importing refined products from abroad.
He said: “The whole purpose of doing this refinery in Nigeria was to utilise our local crude instead of exporting raw materials and importing finished products. We should be able to refine and use the finished products within Nigeria and produce more to export the surplus.”
But he regretted that despite the refinery’s large production capacity, local marketers were only purchasing about three per cent of the output, while the remaining 97 percent of the refinery’s production, including diesel and jet fuel, was being exported due to a boycott by local traders who refuse to buy at the refinery’s lower prices.
Hear him: “I’m selling two to three per cent to small traders who are willing to buy, while the rest 95 to 97 per cent I’m forced to export,” suggesting that some marketers prefer to import for reasons he did not state. Oil marketers wrote to President Bola Tinubu, complaining about the refinery’s pricing strategies, especially for reducing the rate Nigerians buy diesel. They wrote to His Excellency, the President, claiming that we are disturbing the market by dropping our prices.”
Explaining that the refinery had the capacity to produce up to 54 million litres of refined petroleum products per day, depending on crude oil supply, he lamented that local crude supplies had been inconsistent, forcing the refinery to rely on imported crude from countries like the US and Brazil.
He stressed that the situation was further worsened by International Oil Companies (IOCs), which prefered to prioritise foreign markets and selling crude oil at prices above the market rate, adding that just 44 per cent production of the refinery was enough to meet Nigeria’s petroleum needs, while the rest could be exported.
He added: “We have invested a lot on training and capacity of the production with the refinery capacity. As I said, 44 per cent of the refinery production can meet 100 per cent of the requirement of the country.
“So, the balance 56 per cent of the refinery’s production will have to be exported, whether it is jet fuel, whether it is diesel, whether it is PMS, we have to export 56 per cent of our production because 44 per cent will meet all the requirements of the country.
“So, we are not only going to save a lot of foreign exchange by import substitution, but we are also going to generate a lot of foreign exchange by exports. Now, you talked about the transparent mechanism of the pricing. So, as I said, NNPC is giving us the crude and they are going to have people sit here to monitor all the production processes, the stocks which are coming out, everything.
“And they are going to agree on the price at which they will sell the crude in Naira and then they are going to collect all the products. So, they are going to work through to see how the prices will be.
“So, it is not something where we are trying to exploit somebody. We can load 2,900 tankers every day. But we are not even loading up to 29 tankers per day. So, it is very strange that after putting the refinery to supply the products locally, every diesel I am producing, I have to export. Every jet fuel I am producing, I have to export because they do not want to buy from us. So, we are in a very strange situation.
“With investment of about $3 billion in fertiliser and $20 billion in the refinery, unless the business makes some money, it will not be able to invest in upstream. I’ve been an employee of Aliko Dangote for as far back as 33 years. I can say that all the money he makes goes into further investment to ensure the employment of Nigeria’s teeming population.
“He has not built any other palace or any other house. He is living in the same 35-year-old house. The only thing he can sit is an aluminium sheet shed. Nothing else he has built. And 33 years ago when I joined, he had a house in Atlanta. He was a neighbour to Ted Turner, the then owner of CNN.
“He sold it. He had a house in London. He has sold it. When we were doing the sugar refinery in 1997 to 1999, he sold all those houses and put the money in the sugar refinery. All the money we made from our textiles and salt he put it in sugar refining, flour milling, pasta and noodles. Then all the money which we made from that, he started investing in cement.
“Now the money which he has made in cement, he has been investing in oil and gas, fertiliser and refinery. All our businesses are listed companies. So how much profit we are making as a company, how much dividend he is getting, are all published figures. So, you can see all the money where it is going.”
The echoes of the drums rolled out to celebrate the rescue of the 44 teachers and students, kidnapped from some schools in Oyo State, after 56 days in the bush, would surely be disrupted abruptly, with the divergent echoes of a fresh abduction, this time coming from Kogi State.
Reports indicate that the gunmen, struck on Tuesday at the Government Secondary School, Odo-Ekina, in Dekina Local Government Area of the state, abducting four students, the school principal and a National Examinations Council (NECO) ad hoc staff member.
Authorities of the Kogi State Police Command, who immediately unleashed their operatives in hot pursuit of the abductors, said the attack occurred at about 5:25 p.m. while the students were writing their NECO examination.
Saliu Oyiza Afusat, an Assistant Superintendent of Police (ASP) and spokesman of the command, said a combined team of police personnel and other security agencies has launched a search-and-rescue operation following the incident.
Informing that one of the students was actually rescued immediately, she said efforts were ongoing to secure the release of the remaining victims and apprehend the attackers, adding that Naziru Bello Kankarofi, the state Commissioner of Police, alongside the Brigade Commander and the State Security Adviser to the Governor, Commodore Jerry Omodara (Rtd), were already on the way to the scene for an on-the-spot assessment.
Oil prices are expected to go down now with the announcement of Donald Trump, US President that he will no longer impose a 20 percent “safe passage” fee on ships passing through the Strait of Hormuz.
The POTUS, hinged his reversal of the decision on the intervention from some Gulf countries, who pleaded with him not to toe the line due to the massive economic impact the decision would make on the region.
Indeed, oil prices had shot up immediately Trump announced the new levy on Monday while declaring the US ‘the guardians of the Hormuz strait,’ a measure which he said was to pay for the cost of guarding the volatile area in order keep supply of oil flowing.
Reports said that Gulf allies of the US worked frantically to get Trump on the phone in time to talk him out of the idea altogether, while a flurry of appeals came from Saudi Arabia, the United Arab Emirates, Bahrain and Qatar.
In response, the POTUS, posting on his Truth Social platform, wrote: “Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States.”
Trump, who said the investments would be “MASSIVE but, at the same time, extraordinarily good for them, and their future,” added that the deals would see factories, plants, and equipment pour into the US at “Historic levels.”
The Gulf nations have committed to invest trillions of dollars in the US, though it remains unclear how much of that they will actually spend over the next several years.
Meanwhile, the US continues to bomb Iran in what appears to be a resumption of active conflict between both countries, despite an ongoing roadmap to end the conflict.
Reports say operatives of the Osun State Police Command, and those of the Department of State Services (DSS) had tracking the trail of Adeniyi Adeyemi, controversial Director General of the Presidential Foreign Intervention Promotion Council (PFIPC), for weeks, before he was eventually pulled out of his hole on Tuesday.
However, the duo, were said to have pulled back after failing to track him through his mobile phones, which he had reportedly switched off for about two days, making it difficult to locate him, leaving the stage for the members of the Police Intelligence Response Team (PI-RT) led by Moses Lohor, a Chief Superintendent of Police (CSP).
Lohor, said to have previously served as the Commander of the Anti-Kidnapping Squad of Osun State, and reported to have been involved in high-profile security operations and controversies, after taken over fielded his men to pick up signals from their well-oiled signal networks.
Regarded by many Osun residents as one of the key security officers who contributed significantly to the peace and stability enjoyed in Ilesa and other parts of the state during his tenure, he was said to have relied on his contacts before his transfer out of the state, said to have raised concerns from the public about the security situation he would be leaving behind.
His exit from the state was said to be hinged on an incident in 2024, in which he allegedly shot one Iyanda Alowonle, then Chairman of Osun State Motor Transport System, in the stomach at the police station in the state prompting an order for his arrest by then Inspector General of Police (IGP).
His effort was said to have paid off when he successfully tracked down the controversial PFIPC, boss, who was seen on Tuesday evening, in a shot video on social media undergoing interrogation, and eventually handed him over to Ibrahim Gotan, Commissioner of Police in the state.
The PUNCH quoted one of the sources as saying: “The arrest (of Adeyemi) took place on Tuesday morning by the IRT squad, who immediately moved him to Abuja. After he was arrested, he was taken to Ibadan and from there to Abuja.”
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