Nigeria’s downstream petroleum industry may have gone into a frenzy, following clear indications that the Federal Government may no longer sustain the cost of under-recovery, otherwise known as subsidy, due to a the steady rise in petrol import bills.

Industry operators told Vanguard yesterday that it is now clear that pump price may be officially raised soon to enable the government, through the Nigerian National Petroleum Company Limited, NNPCL, to generate enough funds to settle its outstanding bills on products received on credit supply by several international dealers.

Consequently, they speculated that a compromise pump price of N1,000 per litre or more may be underway, though some of them quoted the landing cost of the product at about N1,200 per litre, excluding the cost of delivery to petrol stations.

Presently, NNPCL, according to the dealers, is no longer getting adequate supply to meet the nation’s needs, a situation which has worsened the product scarcity in the past one week while imposing excruciating pains on the transportation sector and the entire citizenry.

The shortage in supply, they further explained, was because some of the suppliers are no longer willing to deliver the product on credit. They also said that more of the products are now being smuggled out of the country.

The current transactional analysis obtained by Vanguard, yesterday, put the landing cost, including product cost, finance cost, freight, port charges, insurance, storage and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA at N1,205.52 per litre.

However, when the transportation cost, marketers’ margins and dues were added, the estimated official pump cost of the product rose to N1,405 per litre.

This indicates that at the proposed N1,000/ltr, under-recovery (subsidy) would still be significantly high, a situation which they said has put the government in a dilemma of choosing between full cost recovery (total elimination of subsidy) or a compromise position of splitting the cost between government and final consumers in a N1,000/ltr pump price.

NNPCL overwhelmed by subsidy

The NNPC Ltd has already indicated that it cannot continue to sustain fuel importation at rising cost while passing the cost to final consumers is proving a difficult decision.

The nation’s oil company was permitted by President Bola Tinubu to utilise the 2023 final dividends due the federation, amounting to N2.1 trillion, to pay for the petrol subsidy.

The president also approved the suspension of the payment of 2024 interim dividends to the federation to augment NNPC’s cash flow, according to a presidency source.

In addition, the national oil company told the president it will be unable to remit taxes and royalties to the federation account for now because of subsidy payments, which it termed “subsidy shortfall/FX differential”.

NNPC’s cumulative petrol subsidy bill from August 2023 has been estimated at N6.884 trillion by December 2024, making it impossible for the company to remit N3.987 trillion in taxes and royalties to the federation account.

In June 2024, NNPC cried out to Tinubu that the subsidy payments were negatively impacting its cash flow and it was struggling to remain a “going concern”, adding that it might not be able to sustain petrol imports because of the ballooning subsidy bill, which it blamed on “forex pressure”.

Also, Mele Kyari, Group CEO of NNPC, informed the president that when the subsidy was removed in June 2023, it led to monthly savings of N400 billion to the federation, which enabled the company to remit its taxes and royalties totalling N2.032 trillion into a sequestered account at the Central Bank of Nigeria (CBN) as at January 2024.

However, in August 2023, the fuel importation costs began to rise, incurring a subsidy bill of N52.73 billion that further rose to N57.59 billion in September and N212.28 billion in October before rising further to N665.60 billion in November, following depreciation of the Naira.

New pump price expected this month

Considering the situation petroleum marketers expect the government to emerge with a new fuel pump price to give direction to the market this month.

A source who opted to remain anonymous said: “We expect that the market would be driven by the forces of demand and supply in the domestic market.

“However, the government would still be guiding the market, mainly through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA that has the responsibility to regulate as well as enforce compliance”.

NMDPRA’s Chief Executive, Engr. Farouk Ahmed did not take calls nor respond to text message, yesterday.

Marketers give conditions for importation

Oil marketers said they are not considering importation immediately because of issues and challenges, including foreign exchange, high cost of funds and uncertainty in the sector
Managing Director, 11 Plc, Adetunji Oyebanji, said: “Well, marketers were unable to import earlier when the subsidy was called off due to FOREX instability and that of the naira that was floated as at the time. These developments have hindered marketers from importing petrol.

“However, the situation with Forex is now steady (away from the jumps) and yes, marketers will import if they are given the chance to. There is no challenge if they are called upon to serve.

“As long as everyone is selling in a competitive price range, we will import. “If prices are set at an economic level, other suppliers might enter the market, improving supply and reducing financial strain.”

We can import if given support — IPMAN

In an interview with Vanguard, yesterday, the former national president of the Independent Marketers Association of Nigeria, IPMAN, and currently the Board of Trustees Treasurer of IPMAN, Elder Chinedu Okoronko, said that marketers are willing to import provided they are given similar opportunities as NNPCL.

He said: “Government should create a benchmark for marketers importing petroleum products to recover their investment on petroleum products, there should be a threshold for government to get marketers involved in the procedure.

“Dangote should be encouraged to come on stream. This will help reduce our exposure to excessive costs and problems. Whatever it will take for our crude to be refined here will help get us out of this mess. Also, the CNG degradation will reduce our exposure and boost our economy.”

Scarcity hindering our operations — Transporters

The Managing Director of a leading transport company with several offices across the country who wouldn’t like his name on print told Vanguard that fuel scarcity has been one of the major problems of transporters in the country.

He wondered: “Has there been any time that fuel is available in the country? We have resolved that whatever price we buy, we shall review the fares to break even. We won’t be working without making a profit,”

He lamented that the local governments, too, are not helping matters with all manners of levies on Transport Company.

He said: “In Enugu, Abia, Rivers, Cross River, and many others collect not less N5,000 each from every boss daily which they tag daily ticket. Also, security agencies extort drivers on the highways, making the business very difficult for transporters.

He also noted that drivers are forced to cough out huge amounts for failure to provide the already suspended proof of ownership receipt by the government.

All these, he said have contributed to the fare hike across the country. A journey from Lagos to the Eastern part of the country costs as much as N30,000 as against N15,000 a few years ago.

Motorists lament as the situation worsens

Checks by Vanguard indicated that the fuel situation within Lagos metropolis and environs has worsened, due to limited supply.

The checks indicated that many filling stations on Ikorodu Road, Agege, Iyana-Ipaja, Ikeja, Somolu, Bariga, Ogba and Surulere were closed.

Meanwhile, some motorists who spoke with Vanguard, yesterday, expressed frustration at the persistent scarcity of petrol.

They also decried the long queues at filling stations as well as increased black market sale of the product at various locations, including Ikorodu, Epe, Badagry, and Ibeju-Lekki, where a litre of petrol sold for N940 and above.

Dangote Refinery Concludes Fuel Refining Plans

Meanwhile, Dangote Group said it has commenced petrol refining, raising hope for increased domestic fuel supply.

Chief Branding and Communications officer of Dangote Group, Anthony Chiejina said the refinery on the outskirts of Lagos, built by Nigerian billionaire Aliko Dangote, can meet demand.

With a capacity of 650,000 barrels per day, Africa’s largest refinery promises to ease oil producer Nigeria’s costly reliance on imported oil products.

Dangote Petroleum Refinery said it was undergoing test runs for petrol production by mid-September 2024.

Experts harp on cooperation

Meanwhile, some experts in the oil and gas business have urged the Federal Government to collaborate with local refineries to process the daily allocation of 445,000 barrels of crude oil for domestic use, based on a tolling arrangement.

Senior Independent Non-Executive Director at Seplat Energy Plc., Mr Rabiu Bello, said that collaborating with local refineries would help the government to secure petroleum products needed for domestic consumption and allow the export of excess products.

Bello said that such collaboration would enable the Dangote Petroleum Refinery and other local refineries to operate profitably and achieve over 65 per cent capacity utilisation without requiring substantial additional investments in crude oil supplies.

He said that the Federal Government should conduct a forensic audit of NNPC/NNPCL’s financial records to assess the actual cost of importing and delivering petroleum products to Nigeria from 2012 to 2024.

Similarly, Mr Henry Adigun, an oil and gas consultant, also called for full implementation of the PIA to streamline operations in Nigeria’s downstream sector of Nigeria’s petroleum industry.

Adigun said that the current fuel scarcity could be mitigated if the government could pay outstanding debts to importers and allow fuel prices to return to market levels.

Vanguard News Nigeria

The Joint Admissions and Matriculation Board (JAMB) has clarified that the board is not involved in the admission process for higher national diploma (HND) students.

Earlier, there were claims by some HND students accusing the board of being responsible for their inability to go for their National Youth Service scheme (NYSC).

The students were said to have claimed they were not mobilised for service because they did a part-time programme for their national diploma (ND).

Fabian Benjamin, the JAMB spokesperson, said the board has no involvement, authority, or control over the admissions process for HND candidates.

He said JAMB is also not responsible for other higher institutions’ programmes besides their regular admissions.

The board added that candidates’ HND admissions are “unknown and irrelevant” to the mandate of JAMB.

“The law that established JAMB states, ‘For the avoidance of doubt, the board shall be responsible for determining matriculation requirements and conducting examinations leading to undergraduate admissions, as well as for admissions to National Diploma and Nigerian Certificate in Education courses. However, the Board shall not be responsible for examinations or any other selective processes for postgraduate courses or any other courses offered by tertiary institutions,” Benjamin said.

JAMB earlier gave a 30-day ultimatum to institutions in August to declare all admissions conducted outside its processing system.

[TheCable]

UEFA has revealed that there will be a reduction in the maximum amount clubs can charge for away tickets in Europe’s three men’s club competitions this season.

The new price caps for away tickets are as follows: Champions League games will be capped at 60 euros, the Europa League at 40 euros, and the Conference League at 20 euros. It’s important to note that these caps apply only to visiting fans and not to home supporters.

From next season, the maximum price for Champions League away tickets will be further reduced to 50 euros, and the Europa League to 35 euros. These changes come as part of UEFA’s efforts to enhance the matchday experience for all fans and to keep football an inclusive sport, valuing and recognizing the contributions of travelling supporters who follow their teams across Europe.

Note that this is not the first time price caps have been introduced. In the 2019-2020 season, the maximum prices were set at 70 euros for the Champions League and 45 euros for the Europa League. These adjustments are a response to incidents in previous seasons where fans protested against high away ticket prices.

UEFA President Aleksander Ceferin emphasized that these changes mark another important step in enhancing the fan experience, reaffirming UEFA’s commitment to making football more fan-friendly.

He said: “This marks another key step in reaffirming Uefa’s commitment to enhancing the matchday experience for all fans.

“By introducing more fan-friendly policies, we continue our mission to keep football as an inclusive sport, where supporters who travel across Europe to follow their teams are valued and recognised.”

[NaijaNews]

The Federal Government of Nigeria, through the Debt Management Office (DMO), has opened offers for subscription to Federal Government of Nigeria (FGN) savings bonds for September 2024.  

According to a statement by the DMO, the subscription period will last for five days, starting from September 2nd. 

The statement indicates that the two-year savings bonds, maturing on September 11, 2026, are offered at an interest rate of 17.202%, while the three-year savings bonds are available at 18.202%. 

Each unit of the bond is priced at N1,000, with a minimum subscription requirement of N5,000 and subsequent multiples of N1,000. The maximum allowable subscription is N50,000,000.  Interest payments on FGN bonds are made quarterly (four times a year).  

The subscription period for these bonds commenced on September 2, 2024, and will remain open until September 6, 2024, according to an announcement by the DMO.  

Settlement is planned for September 11, 2024, with quarterly coupon payments scheduled for December 11, March 11, June 11, and September 11. 

Increased interest rate 

The interest rate of 18.202% on FGN savings bonds stands as one of the highest in recent times and reflects the prevalent high-interest rate environment in the country. In the same month of last year, the interest rate on FGN savings bonds for September 2023 was offered at an interest rate of 12.031% representing an increase of 6.17 percentage points in one year. 

The increase in interest rate for FGN bonds is due to the actions of the Central Bank of Nigeria (CBN) since February when it began its rising interest rate to stem inflation and stabilize the forex market by attracting Foreign Capital Investments (FPIs). 

The apex bank over four Monetary Policy Committee (MPC) meetings has raised interest rates by 800 basis points to control inflation. This has resulted in significant interest in the FGN savings bonds offer.  

Result of FGN bond auction for August 

• In August, the Federal Government of Nigeria raised N374.751 billion through its FGN bond auction, demonstrating continued strong investor interest in longer-term securities. 
• The auction featured three distinct bonds with tenors of 5 years, 7 years, and 9 years, marking a crucial step in Nigeria’s efforts to secure funding for ongoing national projects. 
• The 9-year bond stood out as the favourite among investors, with an impressive subscription of N375.083 billion, far exceeding the offered amount of N50 billion. The bond was allotted N314.213 billion at a marginal rate of 21.50%, indicating a substantial oversubscription of 650.17%.  

[Nairametrics]

The Speaker of the Bauchi State House of Assembly, Rt. Hon. Suleiman Abubakar, has expressed deep concern over statements credited to the Minister of Federal Capital Territory (FCT), Mr Nyesom Wike, threatening to incite political crisis in states where their governors were allegedly interfering in Rivers State political crisis.

Rt. Hon. Abubakar, who’s the immediate-past chairman of the Conference of Nigerian Speakers Forum, in a statement made available to journalists, described Wike’s remarks as ‘reckless’ and ‘unbecoming’ of a leader, emphasising that such rhetoric endanger not only the unity of the People’s Democratic Party (PDP) but also the stability of the entire nation.

He also called on the PDP leadership and the national security agencies to take immediate action to address ‘Wike’s excesses’ .

“The PDP was founded on the principles of democracy, mutual respect, and the rule of law. It is not the personal fiefdom of any individual, regardless of their past accomplishments or current position.

“Mr. Wike’s attempt to use his influence as a tool of intimidation against other states within the federation is a gross misuse of power and a direct violation of the values upon which our party stands.

“As the Speaker of the Bauchi State House of Assembly, I cannot remain silent in the face of such threats. Mr. Wike’s audacious warning that Bauchi State could face political turmoil simply because we stand for what is right is unacceptable.

“More over, Mr Wike’s continues public outburst do a disservice to the PDP and betray the trust that the people of Rivers state and the broadens Nigerian populace have placed on him . It is the responsibility of the National Security Adviser and the media to ensure that individuals who make such inflammatory statements are held accountable. We cannot allow a situation where one man’s ego and thirst for power jeopardize the peace and unity of our nation,” he stated.

He added that Bauchi State like any other state will not be intimidated with Wike’s threats of political turmoil while reaffirming the state’s commitment to upholding justice, peace and rule of law even as he insisted that any attempt to disrupt the peace of Bauchi State will be met with the full force of the law.

[Leadership]

Nigerians are willing to manipulate their identity to gain access, employment, hospital, power, and access to those who are incharge of resources and authority in the country.

Executive Director of the Kukah Centre (TKC), Fr. Atta Barkindo, said this in Abuja at the public presentation of the 26-page project impact report on ‘Strengthening Social Cohesion in Lagos’, and policy brief on the project with support from MacArthur Foundation.

“Number one, it means people are willing to manipulate any identity, as long as it gives them employment, access to hospital, access to power, access to those who are in charge of the resources and the authority in this country.

“And it also shows that we really have a lot of work to do to convince people about why we need to build social cohesion, national identity, common citizenship, and to see Nigeria as a country that belongs to all of us and where we prioritize meritocracy competence, over and above where you come from, or where you belong to or what your political affiliation is.

“And I think that is why the Kukah center went to Lagos. We all knew what happened in Lagos during the 2023 general elections, and maybe that of Lagos has been amplified because Lagos with lots of infrastructure, the media is there, so we can easily hear what happened in Lagos, and probably, in other places, things may have happened that has been worse than what has happened in Lagos,” Barkindo said.

He said in Europe, it is about where someone live.

He said, “That is why you belong. It is about where you are born that matters, not your own state of origin. So somebody was born in Kano, lives in Kano for 40 years, and when it is time to vote, they ask you to go back to your state of origin, not the state that you were born.”

He said that Lagos was a pilot phase, adding that their intention is to go to almost every state across the country and to try and bring people together to have the conversations.

The ‘Strengthening Social Cohesion in Lagos Project’ is a 12-month project conceived in response to the social unrest and electoral violence that erupted during the 2023 general elections.

The report said that over the years, ethnic and regional divides, including issues of indigenes and settlers have combined to reinforce a sense of mutual distrust and suspicion, to a point that identity politics have become a meal ticket for politicians to garner votes.

“During the 2023 general elections, the impact of these divisions played out and led to massive electoral violence, particularly in Lagos state. This necessitated the intervention, particularly as, the aftermath of the elections seemed to have reinforced religious and ethnic disharmony, asNigerians became angrier, more fearful, and less trusting of one another,” the report said.

On what can drive sustainability to strengthen social cohesion, the report recommended continuous community engagement, youth-centred initiatives, fair and just systems, inclusive governance, quality education; and cultural awareness and sensitization among others.

[DailyTrust]

The Nigeria Police have placed a N20 million bounty on a British national, Andrew Wynne, and a Nigerian, Lucky Ehims, who were declared wanted on Monday for allegedly attempting to overthrow President Bola Tinubu.

In a statement on Monday afternoon, the police said a reward sum of N10,000,000 awaits any person(s) with information leading to the arrest of each of them.

DAILY POST recalls how the Police had launched a comprehensive investigation into the activities of foreign national and subversive elements plotting to undermine the democratically elected government in Nigeria through unconstitutional regime change and orchestrating violence across the country.

According to the Force Public Relations Officer, ACP Muyuwa Adejobi, following extensive intelligence gathering and collaboration with other security agencies, nine suspects have been arrested, who received substantial financial backing from foreign sources to destabilize the country.

He said that preliminary findings revealed they orchestrated and funded violent protests by disseminating false information and engaging in other unlawful activities to create anarchy and justify their illegal plot to overthrow the democratically elected government.

“Investigations have identified a foreign mercenary, Andrew Wynne (also known as Andrew Povich or Drew Povey), a British national, who built a network of sleeper cells to topple the government and plunge the nation into chaos.

“He rented a space at Labour House, Abuja, for an ‘Iva Valley Bookshop’ and established ‘STARS of Nations Schools’ as a cover for his subversive activities,” he said.

The Police, therefore, called on the public to assist in any useful information that would help their investigations, saying if Andrew Wynne and Lucky Ehims are seen, they should be arrested and handed over to the nearest Police Station.

[DailyPost]

Several demonstrators hit the streets of Abuja to demand the immediate dismissal of the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Limited, Mele Kyari, over the lingering fuel scarcity.

The protest came out on the heels of the Nigerian National Petroleum Corporation Limited’s confession that its substantial debt to suppliers was endangering the sustainable fuel supply.

Among other things, the corporation highlighted the financial strain was placing significant pressure on its operations and threatening the stability of fuel supplies.

Chanting solidarity songs, they displayed several banners such as: ‘We are tired of fuel scarcity and stories on why refineries are not working, ‘No direction under Kyari’ and ‘We want accountability in the affairs of NNPCL’. 

Addressing reporters on Monday at Unity Fountain after the rally in Abuja, Convener of the Coalition of Concerned Civil Society Organizations, Aminu Abbas wondered why a nation blessed with oil like Nigeria should continue to suffer acute petrol scarcity.

He said: “To President Ahmed Bola Tinubu and all those in positions of power, we say the time to act is now. Show us that you stand with the people, not those who profit from our misery. Mr Kyari must be shown the way out, and the NNPCL must be reformed to serve the interests of all Nigerians. We will not be silenced.

 “The fuel scarcity we endure today is not just a mere inconvenience; it is a calculated perpetuation of suffering. Under Mr Kyari’s leadership, the situation has gone from bad to worse, with no end in sight. What has he done to alleviate this crisis? It is clear he seems intent on maintaining a status quo that benefits only a select few while the masses suffer.

“Why do we, the people, have to endure endless queues, inflated prices, and the daily uncertainty of whether we can fuel our vehicles or power our homes? The answer lies in the gross incompetence and mismanagement that have become the hallmarks of Mr. Kyari’s leadership.”

A British national wanted by the police, Andrew Wynne, also known as Drew Povey, has said the government was unsettled by the EndBadgovernance protest held across the country.

Wynne expressed regret that the government has been suppressing the protesters instead of responding to the citizens’ demands.

This is as he called on the Nigeria Labour Congress to protect the general public as it did to its President, Joe Ajaero when the police invited him.

Wynne stated this in a statement on Monday titled “Protests, not treason.”

It read, “The mass protests over #EndBadGovernance and #EndHunger frightened the government. However, the government turned to repression rather than addressing the people’s demands. Perhaps 40 people were murdered by the police and other security forces, thousands were arrested, and many remain in captivity.

“In Abuja, the authorities have attacked the so-called leaders and organisers of the protests. Ten people face ridiculous charges including treason, mutiny and levying war against the state.”

Wynne noted that the first person arrested by the police, Eleojo Opaluwa, was a former colleague of the Nigeria Labour Congress President, Joe Ajaero and the Vice Chairman of the Union in Kogi State.

He said, “The first person to be arrested in this case was Eleojo Opaluwa. He is a former colleague of Joe Ajaero, who works for NUEE, the electricians’ union, as an organiser in Abuja.

“He is also the Vice Chair of the NLC in Kogi State. He has now been detained for over four weeks with no tangible evidence. His family was told that he had received a WhatsApp message from one of the other alleged leaders. This was after Eleojo had been detained.”

Wynne stated that the ten individuals arraigned for organising the protests hardly knew one another.

He said, “The ten detainees have been accused of conspiracy to commit a range of serious crimes. However, they barely know each other. Five of them may have been members of a WhatsApp group set up to organise the protests in Abuja.

“But the other five are unknown to these comrades. They may be a few of the flag-waving protesters from Kano who were added to extend the range of the organizers to cover the main protests from Sokoto to Maiduguri. “

Wynne said the police investigating the suspects and the government are not on the same page on the matter.

He said, “There appears to be a conflict between the government and the police investigating this case. The head of the Intelligence Response Team told the detainees’ lawyers that he would have released them but that he had orders from above not to set them free. So the police have developed what appears to be a ridiculous case involving the owner of Iva Valley Books.”

Wynne noted that the claim that he had left the country was not true.

“They are claiming that I travelled under the name of Andrew Povich, a Russian-sounding name and that I have now left Nigeria for Russia. Neither of these claims are true. Yomi, who works for Iva Valley Books, has, like the other detainees, been treated in a terribly
inhumane manner.

“He was arrested in front of his wife and three-year-old daughter. The police confiscated all their phones. This was despite appeals from his wife that they needed a phone to get money for food. He was then imprisoned illegally and held in chains, beaten and
tortured for three days. His only involvement was to design flyers for the protests.”

He, however, called on the NLC to protect the general public as it has done to its president.

Wynne said, “The NLC has shown that it has the power to protect its President. It now needs to extend this action to protect its other officers, its members and the general public.”

The NLC had promised a general strike to protect Ajaero from arrest and detention in relation to similar charges.

Despite the flimsy nature of the evidence against the detainees, they face long years in prison unless the trade union movement is prepared to protect them.

On August 7, the NLC said it “condemns in the strongest terms the human rights violations perpetrated by security forces against peaceful protesters.”

[Punch]

“Corruption remains one of the most significant obstacles to the progress and prosperity of our nations. It undermines the very fabric of our societies, erodes public trust, and impedes equitable distribution of resources”  —  President Bola Tinubu in an address to ECOWAS leaders

A senior cousin of mine died recently, aged 96. During the condolence visit to his family, the wife, aged 89, kept repeating to every visitor: “The wicked have done their worst”.

To me, it was absolutely hilarious. But, none of us, younger, was so uncouth as to laugh in my auntie’s face. On many occasions, our refusal to face the truth staring us in the face is also a form of corruption. We thereby avoid having to take the difficult decisions required to make real progress.

Dangote Refinery is the most obvious case study. But, it is not the only one. Permit me to make a categorical statement which anybody not self-delusional should be able to figure out for themselves; anybody includes Alhaji Aliko Dangote.

The refinery will not receive 650,000 barrels of crude from Nigeria for a long time to come – if ever. The reasons are so clear that only corruption of thought prevents the Federal Government, the Nigerian National Petroleum Company Limited, NNPCL and Dangote, as well as his supporters, from admitting the truth.

Crude production and commitments make it impossible

“Producers decline sale of 460,000bpd to Dangote, others”  – News  Report, August 21, 2024

If Dangote wants to know who “the wicked who have done their worst” are, he would have to start from the Presidency, to the Ministry of Petroleum Resources to NNPCL. In one way or another, they delivered the dagger thrusts in the back to Dangote, despite his generous contributions to their campaigns. Self-righteous Obasanjo, as usual, established the template fusing the office of President with that of Minister of Petroleum Resources. He performed woefully on both and left a great legacy of corruption in the two roles. One of the precedents he left behind, making it impossible for Dangote Refinery to ever receive 650,000bpd of crude from Nigeria’s production was the mandatory allocation of crude oil to NNPC’s four refineries as the table below clearly indicates.

Those in government were already aware that 445,000 bpd was already committed to the four scraps we call refineries when Dangote went to discuss with them about his refinery needing 650,000 bdp.

January – July crude oil production

“Oil production fell in Q2 – NBS” – News report, August 28, 2024

The report informed those who want facts instead of fiction, that “The nation in the second quarter of 2024 recorded an average daily production of 1.41 million barrels per day (mbpd)”. In the first quarter, the production was 1.57 mbpd.

Several questions arise. First, with a firm commitment to refineries of 445,000 bpd, how much will be left for the FG, if 650,000 bpd is allocated to the Dangote Refinery? Furthermore, with several other Nigerian refineries springing up, and just as entitled to Nigerian crude, how many more thousands of crude would eventually be allocated to domestic refineries? Remember that 1.095mbpd would have been committed to meet the requirements of just NNPC and Dangote refineries – leaving only 315,000 bpd. Would the 315,000 enough for the FG to export and earn badly needed foreign exchange? The clear answer is NO; and the FG, NNPCL and Dangote are aware of this.

To start with, not all the 1.41mbpd belongs to the FG or NNPCL. In fact, less than half is theirs. So, all that the Dangote Refinery could have legitimately counted on receiving, if it started operations in December 2023, as previously advertised, would have been less than 300,000bpd. Unfortunately, even that volume would not be consistently delivered to the refinery. Here is why.

Dangote swindled by Buhari and NNPCL

“It was beautiful and simple; as all truly great swindles are”  –  O Henry, 1862-1910. VBQ p 239

Alhaji Dangote is no fool; otherwise he could not have become the richest man in Africa for years. But, even the best in every game sometimes blunder.

Dangote consulted with all the people that mattered in the Buhari government before embarking on the project. The most important individual was the Minister for Petroleum Resources; who also was the President – Buhari. He must have been assured of supply of 650,000bpd before proceeding. He believed them. That might turn out to be his greatest mistake in an otherwise string of astonishing successful decisions.

He was probably assured that Nigeria would be producing two million barrels per day by the time the refinery was ready for supplies. He believed them. Deliberately, it was not disclosed that 400,000bpd was being stolen and there was no respite in sight. They also “forgot” to tell him about 445,000bpd committed to NNPCL refineries. Furthermore, the Buhari administration had borrowed huge amounts of money, undisclosed to Nigerians, using future crude oil supply as collateral. Reliable insiders inform me that nearly 300,000bpd is involved in those deals.

Finally, as pointed out before, less than half of crude produced in Nigeria belongs to the FG. So, even if the country produces 2mbpd, only 1mbpd belongs to the FG. Add up all the commitments and it should be clear that, had the FG been an individual it stands accused of 419. Yet, Dangote believed them even as he was being serially swindled.  

“Producers decline sale of 460,000bpd crude to Dangote” – News report, August 21, 2024

So, where will 650,000bpd come from to supply Dangote?

Unforeseen problems

Dangote must have dismissed the possibility of competitors once his giant refinery was approved. The assumption was understandable. With a refinery holding 650,000bpd of crude oil processing capacity, and the crude oil supply guaranteed, there would be no need for another refinery. At any rate, there would be no domestic crude for any challenger to process. Well, that has turned out to be a wrong assumption. At least four other refineries would be ready to come up; and they also are requesting for crude supply from the FG as a matter of right. The FG/NNPCL has a whale of a problem on their hands regarding finding the crude to supply the new refineries.

NNPCL has also taken loans, using future crude as collateral. That will not be available for allocation to Dangote refinery.    Virtually all the independent crude producers operate with loans to be repaid with future crude production. The FG cannot compel any of them to breach their contracts, just to supply Dangote refinery.  

Just in case you don’t know where I am going; let me tell you; Dangote Refinery might never receive 650,000bpd of crude from Nigeria.