Mystery of Dangote Refinery in Nigerian oil politics – Farooq Kperogi

Many Nigerians invested hopes in the Dangote Refinery and thought it would bring stability to Nigeria’s chaotic petroleum industry. But on the cusp of its coming on stream, it began to be dogged by regulatory and other kinds of puzzling troubles from the Bola Ahmed Tinubu administration.

Why is a refinery that is supposed to be a shining light of domestic investment stymied by needless state-sanctioned controversies?

We sought answers to our question on August 31 during an impassioned and insightful two-hour discussion in the third edition of the Diaspora Dialogues, a monthly discussion show organized by Dr. Osmund Agbo, Professor Moses Ochonu, and I, which attracted scores of attendees.

My colleagues and I are by no means experts in the oil industry. That was why Professor Ochonu, who anchored the discussion, first did extensive documentary research to establish the background to the issue and later invited contributions from the audience. Although more than 10,000 people watched the discussion from my Facebook livestream, our Zoom could only contain 100 people at a time.

In response to multiple requests from people who missed the show, I offer a summary of the conversation in this week’s column in light of the continuing centrality of the issues we discussed, especially as Nigeria grapples with yet any steep petrol price hike amid availability struggles in spite of the coming on stream of the Dangote Refinery.

The Dangote Refinery began test production this week and was, according to Aliko Dangote, ready to roll out its petrol right way, but it still faced the challenge of securing enough crude locally to feed its 650,000-barrels-per-day-capacity refinery.

Prof. Ochonu, in his background to the issues, pointed out that one or more possibilities could explain why the Dangote Refinery was stuck in prolonged gestation: the NNPC and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) wanted to withhold crude from Dangote to sabotage the refinery, or they wanted to punish him on behalf of the present administration for allegedly supporting Tinubu’s rival during the 2023 presidential election, or they didn’t have the crude to supply to Dangote and wanted to use the ludicrous and false excuses and propaganda of “substandard products,” “no license,” and non-completion to cover the fact that they were not able to supply crude to Dangote.

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It also seemed, Prof. Ochonu added, that the NNPC and International Oil Companies (IOCs), NNPC’s joint venture partners, are not able to guarantee supply of crude to Dangote for even more tragic reasons.

He pointed to the fact that two successive APC governments have mortgaged much of Nigeria’s 1.5 million bpd production to secure so-called crude-backed loans running into billions of dollars, which have to be repaid with future crude production. It started with Buhari and continues with Tinubu.

Ochonu’s research revealed that the NNPC and the NUPRC wanted to continue exporting crude because such transactions are done in dollars and are shady dealings involving middlemen, bribes, cuts, and layers of profiteering.

Even though the Petroleum Industry Act (PIA) mandates the NUPRC to ensure the supply of crude to local refinery as a priority over export, the NUPRC claimed that they could not compel the IOCs to supply Dangote because the IOC’s had signed prior crude supply contracts with buyers overseas, some of whom financed their crude extraction operations in Nigeria. The IOCs, the NUPRC claimed, would be in violation of those contracts if they supplied Dangote with crude.

Mr. Dan Kunle, a respected oil industry expert and former Senior Technical Adviser to a past Minister of Petroleum Resources, in his contribution, said perhaps the reluctance of the NNPC and NUPRC to supply Dangote crude stemmed from their hope that it would derail the refinery because if Dangote started production, they’d no longer have a reason to export the 450, 000 bpd set aside for local refineries, which has been exported since the local state refineries stopped functioning over a decade ago.

Tinubu’s directive to the NNPC to sell crude to Dangote in naira is a welcome development if implemented, but the key questions are: 1) Where is the crude (650,000 needed by Dangote) going to come from when export contracts and crude-backed loan obligations have already been signed by government and its oil industry entities? 2) Will the NNPC comply with the directive, which reduces its lucrative crude export business?

The show raised several pertinent questions that arise from the accusations and counter-accusations between Dangote and government entities trying to sabotage his refinery:
One, how much of Nigeria’s daily crude production has been committed to creditors who loaned the Buhari and Tinubu administrations billions?

Two, how has the 450,000 crude set aside for domestic refining been handled over the years? According to Mr. Kunle, the NNPC exports these 450,000 barrels because local refineries are currently comatose.

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In what they call crude swap deals, the crude is then refined abroad and resold to Nigeria as petrol. But as Kunle asked during the show, apart from the petrol derived from it, what’s been happening to the other derivatives from the refining process—diesel, kerosene, etc.? The NNPC has never given Nigerians an account of these derivatives. If they’re sold, to whom are they sold and how much has been realized over these decades?

Three, how much fuel do Nigerians consume daily? The NNPC and its subsidiaries bandy around outlandish figures that are disputed by industry experts. Kunle said during the show that one of the potential benefits of Dangote’s refinery is that it will reveal the true, accurate numbers regarding Nigeria’s daily fuel consumption/demand, which will potentially expose one layer of fraud in the fuel importation regime, where many industry experts have long suspected that the importation cabal have been inflating Nigeria’s daily fuel needs to submit false invoices that rely on the bogus consumption claims.

Four, why would Nigeria’s oil law, the PIA, not trump and supersede whatever other contracts and laws NNPC and IOCS have entered into? The PIA clearly authorizes the NNPC to prioritize the crude needs of local refineries such as Dangote and other smaller ones, whose combined daily crude need is put at 597,700 barrels per day (bpd)?

Five, when will the allegedly refurbished Port Harcourt and Warri refineries commence operations (the NNPC has postponed the commencement of operations three times now, with the last postponement done to the end of August), and where will the crude come from and at what price (dollar or naira, subsidized or prevailing international price?).

Professor Ochonu pivoted to the possible motives and identities of people who might have a personal or business investment in killing the Dangote Refinery. He named three.

The first, he said, are the honchos at the NNPC and oil regulating agencies. Their motive, he pointed out, is to maintain the status quo of lucrative and fraudulent fuel importation and crude export businesses.

The second, he pointed out, is the Tinubu government. The motive might be to sabotage a businessman who allegedly funded Tinubu’s opponent during last year’s presidential election.

Another motive, Prof. Ochonu added, might be to protect the rapidly expanding midstream and downstream dominance of Tinubu family-owned OANDO in the Nigerian oil industry. Dangote would be a direct and massive competitor.

The third entities Prof. Ochonu identified were a conspiracy of international oil refineries and a crude-buying and fuel-marketing cabal. He called attention to a report by investigative journalist David Hundeyin that blew the lid on a campaign by a Western oil cabal against Dangote refinery.

The oil company offered to pay Hundeyin and perhaps local journalists to write stories against Dangote using a prepared script of environmentalism and environmental protection, which is a clear ruse to hide their true motive of wanting to maintain the status quo of their purchase of Nigerian crude, refining it poorly below European standards, and re-exporting it to Nigeria at massive profits.

A US-based Nigerian engineer and industry expert by the name of Dr. Muhammad Kabir Hassan, corroborated Hundeyin’s claims during the show.

The final issue tackled in the show had to do with the scandal of NNPC retail (NNPCL) purchasing a company named OVH (OANDO, Velar, Helios).

The OVH scandal is related to what is happening to Dangote because, after allegedly purchasing OVH (for how much, no one knows and commenters on the show said NNPC owes Nigerians an explanation and the transaction numbers), the NNPC then turned around and inexplicably asked a judge to dissolve its retail arm (NNPCL-Retail) and then, in a move that should be a first in history, turned over all of its retail operations (fuel stations and depots all over the country) to OVH to run.

This means that OVH staff and managers have replaced NNPCL staff at all NNPC fuel stations, which have now been rebranded as OVH. OVH, of course, emerged only a few years ago as a result of a merger involving OANDO, Velar, and Helios (hence the acronym). All three were small players in the retail (downstream) sector of the Nigerian oil industry, but with tentacles in fuel importation.

Dr. Hassan enjoined Nigerian journalists to investigate the true ownership of OVH at the Corporate Affairs Commission, the amount NNPC paid for OVH, the terms of the sale, and what, if any, benefits are accruing to OANDO, Tinubu’s family business, from NNPC’s purchase of OVH and its surrender of its sprawling retail business to the acquired entity.

The show is curated on my Facebook page for people who want to watch it.

Mystery of Dangote Refinery in Nigerian oil politics – Farooq Kperogi

Farooq Kperogi is a renowned Nigerian columnist and United States-based Professor of Media Studies.

Farooq Kperogi: The 18-year-old age limit for school certificate

The directive by education minister Professor Tahir Mamman to the West African Examinations Council (WAEC) and the National Examinations Council to not register candidates who are below 18 for next year’s school certificate examinations is generating knee-jerk resistance from people who are obviously nescient of the psychology and philosophy behind age benchmarks in education.

In most countries of the world, children don’t start primary school until they are 6, and young adults don’t start university until they are 18. That used to be true in Nigeria, too—until parents chose to skirt the law, upend time-tested tradition, and commit mass child abuse in the name of fast-tracking the education their children.

In fact, contrary to what the Nigerian news media has been reporting, Professor Mamman has not created a new law; he is only implementing the existing law. He hasn’t “banned” under-18 students from taking school certificate exams; he has merely chosen to enforce an extant law, which has been serially violated by overeager parents who want their children to get ahead by any means.

The 1982 education policy, also called the 6:3:3:4 system, requires that children should be at least 5 years old to start pre-primary school and at least 6 years old to start primary school. If a 6-year-old spends 6 years in primary school, 3 years in junior secondary school, and another 3 years in secondary school, they would be 18 by the time they graduate from secondary school.

This is the global standard. In the United States, students apply to enter universities between the ages of 18 and 19 (because if you don’t turn 6 in September of the year you want to start First Grade, you have to wait until next year). In Finland, Canada, the Netherlands, Japan, South Africa, Germany, the United Kingdom, France, Denmark, etc. it is 18.

The age benchmark isn’t arbitrary. It is based on time-honored insights from developmental psychology and educational research, which examined the cognitive, social, and emotional developments of children.

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For example, Jean Piaget’s stages of cognitive development tell us that around age 6, children transition from what is called the preoperational stage to the concrete operational stage, at which point they begin to develop logical thinking, which is essential for learning the structured curriculum of primary school education, such as reading, writing, and mathematics.

Research also shows that children develop the social skills needed to interact with peers and teachers in a school environment and the attention span necessary to learn, absorb information, and stay engaged at 6, and that children who start school too early struggle with these skills, which can lead to long-term challenges in academic and social areas.

That was why the late Professor Aliu Babatunde Fafunwa was famous for saying any education of children before the age of 5 is a waste of time and even child abuse. From ages 1 through 5, children should be allowed to be children: sleep, play, laugh, and grow.

Of course, I recognize that because most mothers now work, enrolling children in schools earlier than is ideal is a necessity. But the busy schedule of parents is no excuse to buck science, ignore the requirements of a well-integrated childhood, and contribute to the mass production of maladjusted adults.

Similarly, research in developmental psychology shows that by age 18, most teenagers have reached a level of emotional and social maturity that enables them to live independently, make decisions, and handle the challenges of university life.

Neuroscientific research also shows that the brain continues to develop well into the early twenties, particularly the prefrontal cortex, which is responsible for decision-making, impulse control, and planning. By age 18, the brain has typically matured enough to handle the complex cognitive demands of higher education.

Plus, in many countries, including in Nigeria, 18 is the age of legal adulthood, which aligns with the transition to university. This legal framework supports the idea that students are ready to take on the responsibilities associated with higher education, such as managing their own time, finances, and education.

Of course, as with everything, there are always exceptions. Precocious children can and do skip grades and start university earlier than 18 even in the United States and elsewhere. There are exceptionally gifted children who graduate from university as early as 11. But such students undergo rigorous tests to determine that they have intelligence that is far ahead of normal developmental schedules. They are also few and far between.

That’s not the situation in Nigeria. Just like our bad national habit of always wanting to jump the queue—what Americans call cut in line—Nigerian parents have, over the years, developed impatience for the normal development schedules of their children and want them to get ahead against the evidence of science, common sense, and even the law of the land.

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It is not because their children are exceptional. In fact, they are often mediocre. For example, my brother’s son, who is only 14 years old and with average intelligence, registered to take his WAEC exam this year. I told my brother that was inexcusable child abuse.

Nigeria has a bad reputation across the world for sending underage children not just to domestic universities but also to foreign universities. People who work at the International Student and Scholar Services at the university where I am a professor have asked me multiple times why only Nigeria sends underage students here.

The consensus is that such students often lack maturity, have difficulty engaging in adult conversations, and struggle to fit in and get the best of the opportunities they have.

Several Nigerians who teach at other U.S. universities share the same stories. As I pointed out earlier, here in the United States, like in most other countries of the world, students don’t begin their undergraduate education until they are 18, which also happens to be the age of consent. A student who is under 18, by law, can’t attend several extra-curricular activities undergraduates typically take part in.

They need waivers signed by their parents to participate in certain activities, but since their parents are often in Nigeria, they pose logistical nightmares for universities.

For example, in the United States, by law, you can’t sign a lease agreement (to rent an apartment) if you are not at least 18 years old. Many underage Nigerian undergraduates at my school require an adult to co-sign for them. Since their parents are in Nigeria, the burden often falls on Nigerian professors and staff, who are understandably reluctant to co-sign leases of underage strangers who could break their agreements and put us in legal jeopardy.

Dating is also a treacherous legal minefield for the American classmates of underage Nigerian undergraduates in American universities. Having intimate relationship with anyone who is under 18 is statutory rape, even if it is consensual. I am aware of the story of a 17-year-old second-year Nigerian undergraduate girl who had a disagreement with her boyfriend who was from another African country.

Neighbors called the police to intervene. When the police asked for their ID cards, they discovered that the Nigerian girl was underaged. It led to the imprisonment—and later deportation— of the man for statutory rape even when their relationship was consensual. Stories like this are not unique.

Unless someone is exceptionally gifted, which should be proved conclusively with special tests, they should not start university earlier than 18. Fortunately, that is already the law, which is informed by the consensus of research findings in developmental psychology, neuroscience, and social research. Professor Mamman has only signaled his readiness to apply the law. He has my full support.

I read that the National Parent Teacher Association of Nigeria (NAPTAN) said they would sue the federal government for indicating readiness to implement a law that has been in the books for more than 40 years. Good luck with that!

Farooq Kperogi: The 18-year-old age limit for school certificate

Tinubu: Overfed father of starving children, By Farooq Kperogi

The unfailingly abiding emotional investment I have in the wellbeing of common people springs forth from my experiential and mediated identification with the twinge of hunger and misery that poverty breeds.

As people who read my columns know, my father, who died on December 31, 2016, was an Arabic/Islamic Studies teacher at a government-owned primary school for almost four decades. His salary was modest and often not guaranteed both during military regimes and civilian administrations. So, my siblings and I grew up in relative deprivation.

But there were choices he made as a father that earned him our unalloyed filial respect, loyalty, and love in spite of our lack. He never ever ate outside for any reason. Even when he was invited to preside over naming or wedding ceremonies, as Malams of his stature often were, he didn’t eat the food he was offered at the venues of the ceremonies. He would always bring it home to us.

When his colleagues would ask him why he didn’t eat outside, he would tell them that he couldn’t bear to luxuriate in outside culinary treats when the children for whom he lived stayed hungry at home or ate inferior food. He thought it was unjustifiably selfish.

He also never had more meat on his plate than we had when we had lunch or dinner. Each time our stepmother gave him more pieces of meat than she gave us children, like clockwork, he would consistently share the extra pieces with us and would watch us like a protective mother hen as we ate.

If he didn’t have enough money to buy new clothes for us, he never bought for himself. In fact, he would often buy clothes for us at the expense of donning threadbare clothes. His fellow Malams were often better dressed than he—because of us.

And he always ensured that, no matter the circumstance, our school fees were paid—even if we couldn’t afford to buy all required textbooks.

We didn’t need to be told that he loved us with the entire fiber of his being. We could feel, even touch, his pure, total affection.

So, on days we had no food, or had food but without meat, and on festive occasions when we didn’t have new clothes like our agemates did, we were never resentful. We knew we would have anything if he could afford it.

And even when he disciplined us severely—and he was a strict, stick-wielding, no-nonsense disciplinarian—for our youthful transgressions and indiscretions, we forgave him easily. As young as we were, he made us understand the concept of tough love without articulating it.

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That’s why I miss my father sorely every single day, and why he continues to be my most important role model.

There is a parallel between being the father—or mother—of children and being the president of a country. Just as selfless, responsible parenting automatically inspires filial respect and love, compassionate, responsible governance engenders patriotism and makes possible national self-sacrifice from citizens.

The more I read stories of President Bola Ahmed Tinubu’s profligate expenditures and vain acquisitions amid the once-in-a-generation cost-of-living crisis that ordinary Nigerians are going through as a direct consequence of his economic policies, the more I think of my late father.

If my father had splurged on himself while his children starved, would we have been as emotionally attached to him as we were—and still are posthumously? Would he have been able to persuade us that we didn’t have the fine things of life because he lacked the means to buy them for us?

Nigeria has one of the world’s highest poverty rates. Most Nigerians now live in way worse poverty than I lived in when I was growing up. Yet Tinubu’s economic reforms consist basically in denuding citizens of some of the subsidies we had taken for granted—relatively cheap petrol (which leads to affordable transportation and food costs), subsidized education (which allows the son of a primary school teacher like me to go to university), etc.

The justification for these “reforms” is that Nigeria is too poor to be able to sustain programs that help the poor to survive and thrive. So, sacrifice is required to rejig the economy. Money saved from the (temporary) withdrawal of the state from the lives of the people will be invested to ensure a greater, brighter, more prosperous tomorrow. Untrue, but fair enough.

But why is the sacrifice a one-way traffic? At the time that everyday folks have been told to contend with unsustainably extortionate petrol and electricity prices, which have had a domino effect on all aspects of life, President Tinubu bought for himself a new presidential jet worth $150 million, which is the equivalent of more than N150 billion!

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This is aside from the fact that the sum of N12.7 billion has been allocated in the 2023 supplementary budget for the maintenance of the presidential air fleet. A country too poor to provide much-needed subsidies for its poor shouldn’t have a president who flies in an expensive plane or an air fleet that guzzles that much money to maintain.

The UK is a much wealthier country than Nigeria. It gives its citizens the sorts of subsidies that Nigerians have been blackmailed into accepting that they are unworthy of, but the UK Prime Minister had no dedicated aircraft until 2016 when a plane was purchased for the Prime Minister (and “other ministers and senior members of the royal family when they travel on official engagements”) at the cost of $15 million.

UK government officials, including the Prime Minister, used to charter commercial jets for official travels. Until 2016, the “United Kingdom was, in fact, the only one among the Group of Seven industrialized countries without a dedicated government VIP jet,” according to the Points Guy website.

Recall that Tinubu caused a well-deserved national stir when he ordered the purchase of a presidential yacht worth N5 billion sometime in 2023. It also came to light that he bought for himself a bulletproof Escalade SUV worth N1.5 billion, among other examples of indefensible epicurean lavishness.

In response to my last week’s column, a government apologist (who knows if he is a government appointee?) pointed out to me that, “The price of petroleum [in Nigeria] was the second lowest in the world (in dollar terms) by the time the subsidy was (partially) removed.”

He said this as an indictment. He is miffed that Nigeria had the second lowest petrol price in the world. I doubt this is even true, but even if it were true, what’s wrong with that? It’s like a wealthy but stingy father who splurges on himself telling his starving children that they don’t deserve the crumbs he throws their way because there are poorer neighbors with way hungrier children than they.

So, the rich but penny-pinching father stops the crumbs to the children but continues to luxuriate in conspicuous opulence while telling his children to learn to sacrifice for a greater tomorrow. That’s not a father worth respecting or obeying.

A president who indulges in the kind of primitive acquisitiveness and conspicuous consumption that are becoming the trademark of President Tinubu at the expense of subjecting the broad masses of the people to the most extreme deprivation that Nigeria has witnessed in living memory has no moral right to expect patriotism or willing sacrifice.

If President Tinubu and members of this government are serious about “sacrificing,” in light of the fact that Nigeria is “broke,” they should first give up their own “subsidies.” There is neither honor nor dignity in being the overfed father of starving children.

Tinubu: Overfed father of starving children, By Farooq Kperogi

Farooq Kperogi is a renowned newspaper columnist and United States-based Professor of journalism.