“NNPC no longer owns a 20 percent stake in the Dangote Refinery. They were met to pay their balance in June, but have yet to fulfill the obligations. Now, they only own a 7.2% stake in the the refinery”*- That exactly is the words of Alhaji Aliko Dangote, President of Dangote Refinery Ltd on Sunday, the 14th of July, 2024.
The President of DRL was speaking to the fact that NNPC Ltd have reneged on it’s initial promise to acquire 20 percent of DRL having paid about $1 Billion Dollars for 7.2 % of the stake thereof.
On the same day, Femi Soneye, spokesperson for NNPC replied the President of DRL in a statement issued by him, which read, *”NNPC Ltd periodically assesses its investment portfolio to assure alignment with the company’s strategic goals…The decision to cap its equity participation at the paid up sum was made and communicated to Dangote Refinery several months ago.”*
In short, the NNPC walked away from the payment of the remainder sum of about $1.76 Billion Dollars to complete it’s promised stake of 20 percent shares of $2.76 Billion Dollars transaction entered into in September, 2021, during the administration of former President Muhammadu Buhari. The national oil company felt that the completion of the payment for the shares of DRL, do no longer align with “the company’s strategic goals”.
This right to walk away from a project that does not align with a company’s strategic goals is a sacrosanct right that a company may decide on before completing a transaction, provided it does not become liable for a breach of contract. In this case, no issue of breach of contract has been brought up by both parties and so the decision of NNPC can be deemed as genuine on the part of its board.
Yet, the $1 Billion Dollars investment by NNPC , despite the fact that NNPC itself have three refineries which it is battling to bring back to life and which is also a project very close to its duties of providing petrol to Nigerians, speaks a lot about the genuine purpose of NNPC, devoid of the latent acrimony that should have existed between a competitor about to take up a part of one’s share in the market.
The dealing between NNPC and DRL with regard to the shares purchase shouldn’t have become a public banter, taking into cognisance that NNPC had, without publicity, communicated its stand on being unable to complete its share stake in DRL, before the President of DRL brought the whole transaction back into public focus. Why did this become a public issue, one will ask.
As this throwback on shareholding between the two partners was dying down, the President of DRL threw a bombshell in the direction of NNPC when at the House of Representatives on Monday, July 22, 2024, he said, as reported in Business Day newspaper of July 23, 2024, that; *”Some of the terminals, some of the NNPC people and some traders have opened blending plants somewhere off Malta. We all know these areas. We know what they are doing.”*
The Business Day report, likewise that of some other newspapers, suggested that Dangote was insinuating that “some officials of the Nigerian National Petroleum Company (NNPC) Limited and oil traders have blending plants in Malta… from where they import substandard products.”.
This weighty allegations by Dangote against NNPC officials, that tends more towards economic sabotage of the Nigerian state was vehemently denied, immediately, by the Group Chief Executive Officer of NNPC, Mele Kyari, via a post on social media platform, X (formerly Twitter) where he stated that, “To clarify the allegations regarding blending plant, I do not own or operate any business directly or by proxy anywhere in the world with the exception of a local mini Agric venture. Neither am I aware of any employee of NNPC, that owns or operates a blending plant in Malta or anywhere else in the world.”
The X post finally concluded; “A blending plant in Malta or any part of the world has no influence over NNPC’s business operations and strategic actions.” The NNPC boss vowed to sanction any employee of NNPC that’s established to have indulged in such heinous infringement against the Nigerian state.
To this emphatic denial by NNPC’s helmsman, no response or rebuttal whatsoever came from the President of DRL, who threw this bombastic allegations against the NNPC and its staffs and thereby the Nigerian public was denied the opportunity to ascertain whether NNPC had in truth committed against Nigerians the heinous crime of importing substandard petrol products from a blending plant in Malta into Nigeria. The whole dust of acrimony between the partners again mellowed into thin air.
And, yet again, we got served another spectacle ! That was when DRL, commissioned in May 2023, now sometimes around ten months after its commissioning, in 2024, started its public complaint against NNPC and other regulators of the oil sector, of its inability to get enough crude oil from Nigeria to feed it’s 650,000 barrels per day capacity refinery.
To some Nigerians, it was a cabal that was up against DRL, so that the refinery may not prosper for the benefit of Nigerians, while some others who were learned in the art of the business of oil and gas, including the President of the Trade Union Congress (TUC) and PENGASSAN, Alex Usifo, wondered how the promoters of such a gigantic project will not have sourced for the basic product (crude) it will use, even years before the refinery came on board.
All in all, it came into focus that DRL had not gone into negotiation with its partner, NNPC, nor entered into a contract with IOC’s on crude supply, before coming into full swing.
After, hues and cries from DRL and Nigerians, that attracted international press with the NNPC being portrayed as the main clog in the wheel of DRL being able to supply Nigerians with abundant petrol throughout the nooks and crannies of Nigeria, President Tinubu and the Federal Executive Council (FEC) responded that DRL be sold crude oil in Naira, instead of the international practice where buyers are sold crude in dollars. DRL too under this same arrangement is to sell petrol to NNPC in Naira.
Matters settled, one will say, heaving a sigh of relief, but it was as if wahala done tie wrapper between the two partners.
For immediately after this came the brouhaha over petrol price per litre between the two. While NNPC announced that it had bought petrol from DRL at ₦898 per litre, the latter denied claiming that it sold at a lesser price to NNPC.
Till now, DRL have not disclosed how much exactly it sold petrol per litre to NNPC, inspite of Nigerians demanding to know, while NNPC insists that it bought at the exact price it announced. DRL have left Nigerians to guess what exactly the price they sold to NNPC is or was.
The all encompassing thought is, why should NNPC be the one to take the public scrutiny, the barrage of criticisms and the lamentations of people’s outcry for the more than ₦40 Naira increase that arose from the sale of DRL’s petrol to NNPC, when at that point in time, the pump price of petrol per litre was ₦858. Why is DRL taking the people’s money and not the people’s cudgel, one might be tempted to ask ? Who exactly is speaking the truth between the two entities ? Why have DRL left it’s estranged partner, NNPC, right outside in the cold while it continues a cozy relationship with Nigerians ?
DRL told Nigerians that its petrol product is cheaper than the one imported by NNPC, inspite of the fact that NNPC undertook to be the sole off taker of all its petrol product.
NNPC in it’s own case is said to be buying at ₦898 from DRL and selling at ₦766 to Independent Marketers thereby taking away the burden of about ₦132 per litre off the shoulder of every Nigerian. That is, NNPC seems to be doing a thankless job because its partner DRL have completely refused to acknowledge that it sells at ₦898 to NNPC. Likewise, Nigerians are in the dark as to the fact that a burden of ₦132 has been taken off their neck per every litre of petrol they buy. Who then pockets the ₦132 shortfall by which NNPC sells to Independent Marketers ? Dangote Refinery or NNPC or Nigerians ? The answer dances there right in the open.
DRL in the course of the price naming war between it and the NNPC announced that the arrangement for the buying and selling of crude oil in Naira is to begin this month, October 2024 and according to the latest of the news on this, this agreement is said to have taken off but NNPC have supposedly thrown in a joker that it will no longer be the sole off taker of DRL petrol products. NNPC is said to have thrown the market open to every willing and able buyer to contact DRL in order to purchase petrol in bulk as much as it can offer.
The question therefore arises whether the rat and cat partnership between NNPC and DRL respectively, have gone the way of one eating the other for supper ? Have the competitive partners finally realised that their partnership of foisting a monopoly on Nigerians may at the end not be beneficial to the people ? Who can really help one to answer this question ? Where lies the truth and an answer to this ? Have the relationship of the partners gone sour ?
The answer is dancing there in the winds !
Femi Oniyide Esq,
08036877692.
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