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Mystery of Dangote Refinery in Nigerian oil politics – Farooq Kperogi

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Farooq Kperogi

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.

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How FRSC emerged best in FG website performance under new Corps Marshal 

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How FRSC emerged best in FG website performance under new Corps Marshal

By Bisi Kazeem

Nigeria is one of the few African countries that have leveraged some road safety principles and recorded remarkable progress in road safety administration and management despite a ‘gloomy’ beginning.

The road safety situation in Nigeria was so deplorable that the World Health Organisation once described the country as ‘worst in the world to travel’ only next to Ethiopia.

That narrative changed through government’s efforts by establishing the Federal Road Safety Commission as the Lead Agency to guarantee safety on every centimetre of Nigeria’s expansive road network of 204,000km. This establishment was done ten years prior to United Nations’ recommendation for all member states to establish agencies directly situated under the central government for ease of unfettered operation.

In its three decades of unbroken services to humanity as a lead agency in traffic and safety management, FRSC has recorded tremendous achievements in the area of Traffic Engineering, Road Safety Administration, Traffic Management and Crash Reduction.

The Corps has now come of age after going through good times and tides. Through the use of state of the art Information Technology facilities, the Corps has been able to enhance its operational capacity aimed at promoting public safety and security. Having been propelled by the imperatives of entrenching ease of doing business as well as aligning with international standards in all fronts, the Corps has successfully designed and operated over 30 web applications for its operational activities so as to create an accessible platform for the general public.

Some of these applications cover the Uniform Licensing Scheme, under which is the One Driver One Record which enables FRSC to track and match records of drivers with their drivers licence, vehicle number plate, traffic offences and others in a single view.

Introduction of the toll free 122 emergency number and a 24 hours call centre established to reduce response time for crash victims; a single step that has reduced emergency response time from 50 minutes to 15 minutes, thereby decreasing the number of fatalities in crash situations. More so, the introduction of Verification Portal for drivers licence and number plates, the introduction of the Road Transport Safety Standardisation Scheme (RTSSS) for uniformity and harmonization of fleet operators in the country, the Driving School Standardisation Scheme (DSSP), the introduction of the speed limiting device whose enforcement began on 1st February, 2017, introduction of vehicle and body-worn cameras to monitor patrol operations, and the vehicle tracking system among others, are policies formulated and implemented to fight road traffic crash in the country to extinction.

The Corps led that foundation for itself, knowing that the road transportation sector in Nigeria accounts for over 90% of passengers and freight movement, and this exerts undue pressure on the FRSC in discharging its cardinal responsibilities.

In view of the growing need to surmount these visible and invisible challenges, the Corps embarked on several reforms which include but not limited to the following: Development of a national road safety strategy road map, improved operational efficiency, enhanced regulatory environment, and accelerated response capability to situations that needed immediate actions.

Added to the aforementioned, the Corps took a step further, defined its path in tandem with UN decade of action as well as the mantra of functional 21st century organization by chatting a path to meet the Accra Declaration of 50% Reduction in Fatality by 2015.

That aside, it went all the way to institute modalities to achieve UN Decade of Action on Road Safety of 50% Fatality Reduction by 2020, and placed Nigerian roads within the league of 20 global safest roads by 2020, as well as UN Decade of Action 2021-2030 which aims at having a society where crashes result in no deaths.

To achieve the stated targets, the Corps developed transformational initiatives focused on People, Processes and Technology (PPT).

That is why today, not only do its staff pride as the most disciplined, but the Corps stands as the best Information Technology-driven organization in Nigeria with its robust data base and over 95 percentage digitalized administrative and operational procedures.

Having given that background, it is noteworthy to look at how the Corps, under the leadership of the present Corps Marshal, Shehu Mohammed, who of course, was amongst members of the group who blazed the trail to set up what is now known as a technology-driven organization, emerged the best amongst over 315 MDAs in website performance and ranking.

It may interest you to know that the 2023-2024 Federal Government Scorecard for ranking Websites of Ministries, Departments and Agencies is an essential benchmark for evaluating the current state of government websites in Nigeria.

The FRSC’s website was selected as the best following a very meticulous, highly diligent and extremely objective review of the Websites of 315 MDAs which were subjected to evaluation for the period under consideration.

The Bureau of Public Service Reforms, a Federal Government agency under the Presidency that organised and issued the award on behalf of President Bola Ahmed Tinubu GCFR justified the relevance of the ranking.

According to them, the effectiveness and functionality of government websites have become a critical component of Nigeria’s public service reform agenda as the nation increasingly adopts digital platforms as the primary means of communication, service delivery and information dissemination. As such, FRSC’s website was found to host a huge collection of information about all products and services of the Corps for the consumption of the general public. This feat placed the Corps ahead of its contemporaries in public service.

That said, to unravel the mystery behind how FRSC made it to the top in information technology and eventually emerged best amongst peers, it is important to look at the direction of leadership and policy focus of the administration of Corps Marshal Shehu Mohammed.

The trajectory of his career as a road safety professional from the day he joined the services of the agency till date is the very factor that has shaped him as an all-rounder in road safety management and administration with a firm and fair handling of goal-oriented affairs as the Corps Marshal.

Upon assumption of office, Shehu Mohammed alongside his team of management, designed and implemented programmes of action, as well as a proactive template to advance the growth of the Corps in all ramifications, with the aim of trending down road crashes and fatality rate.

Being a believer in technology, the Corps Marshal made the digitisation of FRSC operations a cardinal part of his policy thrust. To that end, he took a bold step that was the first of its kind since the establishment of the Corps, by appointing a Technical Adviser who will mount the wheels that would eventually bring FRSC to speed in the deployment of information technology in the work place.

This placement of round pegs in round holes was the catalyst, the propellant force, as well as the icing on the cake that catapulted the Corps to more enviable heights and achievements in digitisation.

Retrospectively, Corps Marshal Shehu Mohammed has been an integral part of the digitalization process and has driven the technology feat of this noble organization for years now, beginning from Corps Marshal Osita Chidoka who started the revolution to the erstwhile Corps Marshal, Dr. Boboye Oyeyemi who sustained the expertise, through to the immediate past Corps Marshal, Dauda Ali Biu who kept the momentum.

To say the least, his experience has seen the Corps measuring to billing as he is already on the glorious path of unravelling the mystery that would finally bring about the overall digitisation of FRSC operations.

Additionally, just as stated in my last piece, part of the major initiatives introduced by Corps Marshal Shehu Mohammed that brought about the needed result for the Corps is the ongoing digital revolution.

The introduction of Electronic Document Management System (paperless) in the workplace would surely make FRSC the first Federal Government agency to go paperless. This initiative, apart from the speed it will bring to the workplace, will also enhance ease of doing business and bring down the cost of governance.

In the same vein, adequate progress is being recorded on the operational front too. Shehu Mohammed has gone a step further by initiating and launching the first FRSC Mobile Application, a one-stop shop for all FRSC products and services, for quality service delivery.

The FRSC Mobile App was introduced to generate and analyse real-time data on operations, Traffic Crashes data management, and road conditions, and provide customers with feedback on the Corps’ products.

The introduction of the National Crash Information Recording System portal (NACRIS) is another ground-breaking robust data collation initiative that will help in policy formulation, planning, and education.

With this portal, Nigerians could easily report cases of crashes from the point of crash. This initiative will boost data legitimacy and change global perception of FRSC crash data reports for good.

The Corps under his purposeful leadership has proved to be right on track to allay the menace of road traffic crashes on Nigerian roads and usher in a season where there would be no crashes; where even if crashes will occur, it would not result in the death of any Nigerian.

Achievements of such would be recorded based on many pillars and strict implementation of his policy thrust fused in the Corporate Strategic goals of the Corps.

To this end, suffice to state that as a performance-driven organization, with clearly set measurable Key Performance Indicators, FRSC is today, the only law enforcement organization in Nigeria certified by the International Standard Organization.

 

* Bisi Kazeem, a veteran road safety professional and a public relations expert, writes from Lagos, Nigeria.

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Farooq Kperogi : October surprise in American presidential elections

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Former President Donald Trump and United States Vice President Kamala Harris

Farooq Kperogi : October surprise in American presidential elections

Several faithful readers of this column who have followed it from the mid-2000s in the Weekly Trust have asked me to spice up my columns with occasional commentaries on American politics and culture, which was the column’s dominant thematic preoccupation in its earliest incarnation.

This year’s presidential election offers an opportunity to do that. This week I want to explore a phenomenon called the “October Surprise” in American presidential elections about which I had written 16 years ago when Barack Obama and John McCain squared off.

An “October Surprise” is any dramatic last-minute event, typically in October but occasionally a little later than October, that swings the election to the disadvantage of a leading candidate. Such dramatic events are believed to have the potential to influence the outcome of the election by swaying public opinion or shifting the narrative around the candidates.

October surprises symbolize the unpredictable nature of the final stretch of the presidential campaign and the high stakes involved in influencing the electorate.

Before talking about what this presidential election year’s October Surprise will be, I want to reference previous notable “October Surprises” and how they influenced the outcome of past elections.

The term “October Surprise” was coined during the 1980 presidential election between Ronald Reagan and Jimmy Carter (the only president my state of Georgia has produced). A year before Election Day, radical Iranian students had invaded the U.S. Embassy in Tehran, Iran, and held the Americans they found there hostage.

President Carter worked throughout the campaign to secure the release of the American hostages during which eight American servicemen were killed.

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According to the Associated Press, “Critics say the Reagan team was so concerned that Carter would gain a boost by winning their release just before the election, that his campaign manager and others negotiated privately with the Iranians to ensure that did not happen.” This cost Carter the 1980 election.

But before October Surprise became entrenched in America’s political lexicon beginning in 1980, it happened eight years earlier. In 1972, according to American presidential historians, President Richard Nixon’s administration announced a potential breakthrough in the Vietnam peace talks, which bolstered Nixon’s re-election prospects. The war was a sticking point in the country.

During the 2000 presidential election, the October Surprise was a damning revelation that George W. Bush had been arrested for driving while he was drunk. It’s called DUI (i.e., driving under the influence of alcohol or drugs) here. It negatively impacted his image among voters, which probably caused him to lose the popular vote—and only narrowly win the Electoral College vote.

Bush became president only because of America’s strange, archaic, and convoluted system of electing presidents, which deprives voters of the opportunity to directly elect their presidents. He was declared president because he won the then battleground state of Florida by 537 votes out of nearly six million cast, which gave him the state’s Electoral College votes.

In the final weeks of the 2004 election, all the major polls predicted that John Kerry would defeat Bush. He was a bumbling, incompetent president who was very unpopular.

Then Osama bin Laden allegedly issued a videotape that criticized Bush and warned U.S. voters that “your security is in your own hands” in the election.

“It changed the entire dynamic of the last five days,” Kerry told newsmen in 2008. “We saw it in the polling. There was no other intervening event. We saw the polls freeze and then we saw them drop a point, because all the security moms, it agitated people over 9/11.”

There was also an October Surprise in the 2008 presidential election that nearly torpedoed Obama’s lead and punctured his campaign’s overweening confidence. On October 30, 2008, conservative British newspaper TimesOnline broke the news of Obama’s late father’s half-sister, identified as Zeituni Oyango, living in the United States illegally and that she first came to the U.S. on the invitation of Obama.

The woman was mentioned in Obama’s best-selling autobiography Dreams From My Father.

She was invited by Obama to the United States to witness his swearing-in as a U.S. senator. She returned to Kenya after Obama’s inauguration and came back again on her own. She applied for asylum, but her application was rejected and was ordered to be deported back to Kenya.

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But she somehow escaped and had been living in the slums of Boston. The TimesOnline story initially did not gain traction in the United States until the Associated Press pounced on it and added a fresh dimension: that Obama’s aunt was not only here illegally but had contributed money to the Obama campaign, which violates America’s campaign laws, which stipulate that only U.S. citizens and legal permanent residents can contribute to political campaigns.

The news dramatized Obama’s “otherness” in more concrete ways than the McCain camp had tried vainly to do. Because AP’s reporting showed that the woman contributed up to $265 to the Obama campaign even though she was neither a U.S. citizen nor a lawful permanent resident, she helped to feed the Republican Party-inspired allegations that Obama’s unprecedented financial buoyancy was consequent on his receiving illegal donations from non-Americans.

What saved Obama was that Sarah Palin, McCain’s running mate, fell for a cheap prank by two well-known Canadian comedians by the names of Marc-Antoine Audette and Sebastien Trudel who go by the stage name “the Masked Avengers.”

They put a call through to Sarah Palin, which she picked. One of the comedians pretended to be then French president Nicholas Sarkosky. Palin believed him. And she went on for over 5 minutes discussing inane issues with the “French president.” The conversation further betrayed her shallowness and ignorance of foreign policy issues.

This dominated the news cycle days before the election. Sarah Palin’s inability to detect that she was being tricked even in the face of so many red flags during the conversation had the effect of canceling out the scandal of Obama’s aunt living illegally in the US and making illegal donations to Obama’s campaign. (Obama’s aunt later became a legal permanent resident in 2010 but died four years later).

Finally, in the 2016 presidential election, FBI Director James Comey announced that a renewed investigation had been launched into Hillary Clinton’s email practices. This became a major talking point just 11 days before the election, which some argued influenced the final vote. Although she defeated Donald Trump by three million votes, America’s Electoral College system caused her to lose the presidency.

So what might be the October Surprise in this year’s presidential election? It’s hard to tell, particularly because Donald Trump is not a conventional candidate. He is the most morally flawed, most openly racist, and most explicitly psychologically damaged presidential candidate America has had in recent memory. Yet nothing seems to stick to him.

He once boasted that he could murder someone in broad daylight in the streets of New York and nothing would happen to him. He is what Americans call a “Teflon candidate.” Teflon is a substance used to cover the surface of cooking utensils, etc. in order to prevent extraneous substances from sticking to them).

If any candidate should be fearful of an October Surprise, it should be Vice President Kamala Harris, whom polls favor to win both the popular vote and the Electoral College vote and make history as the first woman to be president of the United States.

Had the attempt on Trump’s life taken place in October, that would have been the October Surprise that would hand him the presidency. Some people think it may happen again next month.

Farooq Kperogi : October surprise in American presidential elections

Farooq Kperogi is a renowned Nigerian columnist  and United States-based professor of journalism.

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Farooq Kperogi: Conspiracy of price gouging between Dangote and NNPCL

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Farooq Kperogi

Farooq Kperogi: Conspiracy of price gouging between Dangote and NNPCL

I had said to myself and to people close to me that I would never write again on the untenably rising prices of petrol in Nigeria because when I wrote column after column to presage the unfolding petrol-price-inspired cost-of-living tragedy, scores of people across the Nigerian political divide impassionedly disagreed with me because the presidential candidates to whom they abdicated their brains in 2023 also demonized “petrol subsidies” and promised to remove them.

But the extortionate prices Nigerians are still paying for petrol in spite of the well-justified hopes that the coming on stream of the Dangote Refinery would bring down prices—and the blindingly perplexing and never-ending cascade of blame games, accusations and counter-accusations between the Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL)—compelled me to revisit this issue.

There appears to be a well-choreographed conspiracy between the Dangote Refinery and the NNPCL to take advantage of Nigerians by keeping petrol prices unjustifiably high. This is somewhat similar to what we call price gouging in the United States.

Price gouging occurs when businesses calculatedly raise the price of goods, services, or commodities to an excessively high level, especially during a crisis or emergency when demand spikes and supply is limited. In the context of fuel, price gouging is said to occur if a company or companies sharply increase fuel prices in response to supply shortages.

Although price gouging typically happens during natural disasters, pandemics, or situations where essential goods become scarce, it can happen anytime. It is, in essence, the exploitation of consumers’ vulnerabilities during critical times. That’s what I suspect is happening in Nigeria now.

NNPCL is the sole buyer and distributor of fuel from the Dangote Refinery. It controls the supply chain and effectively excludes independent marketers from accessing the refinery’s output. That’s not free-market capitalism; that’s state capitalism. That’s not deregulation; it’s regulated deregulation.

But the Dangote Refinery’s price regime is also puzzling. Oil industry expert Mr. Dan Kunle forwarded to me a WhatsApp message that breaks down the landing cost of petrol per liter, which added up to N1107. I haven’t verified the accuracy of the claim, but I assume that it must have some credibility to deserve being forwarded by Mr. Kunle whose knowledge of the industry I have a deep admiration for.

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The message says “based on publicly available data,” which it admitted “are subject to change and may vary depending on market conditions, exchange rates, and other factors,” Dangote Refinery is exempt from incurring costs related to freight (N86.48), jetty depot (N15.35), storage (N12.58), financing (N34.67), foreign exchange (N23.45), NPA charges (N10.58), NIMASA charges (N5.29), and customs duties (N51.17), and therefore should, by my calculation, charge no more than N518.35 per liter.

So it’s a mystery how Dangote and NNPCL agreed on N766. If Dangote Refinery acquired its crude oil in dollars, did it also cover salaries and operational costs in dollars? Crude oil is just one part of the overall production cost.

What’s more concerning, perhaps, is that ₦766 per liter cost seems to be the expected price even after Dangote begins purchasing crude in naira from the NNPC. How can this be justified, especially when the additional costs associated with exporting crude and importing refined products would no longer apply once Dangote receives domestic crude from October 1st?

Additionally, as my friend Professor Moses Ochonu pointed out during our August 31 “Diaspora Dialogues” show titled “Who Wants to Kill Dangote Refinery and Why,” under existing laws, NNPC is supposed to supply its own refineries with 450,000 barrels per day, which was historically sufficient to meet local demand before those refineries became defunct.

That crude was never meant for export. It only started being exported after the refineries stopped functioning. So, as Professor Ochonu pointed out, why not simply allocate that crude to Dangote Refinery, paying only for the refining process plus a modest commission or profit, and then sell the refined products to Nigerians at more affordable rates?

This approach would involve some level of subsidy, but that’s how the system was intended to function when state-owned refineries were operational. In any case, in spite of the sustained propaganda against subsidies, every serious country on earth dispenses subsidies, including energy subsidies, to its citizens. Nigerians are entitled to a subsidy on a quarter of the country’s crude output, and subsidizing petrol makes sense because of its broad impact on the economy.

Moreover, this method would be far less costly than the inflated and fraudulent subsidies that have been paid for imported fuel over the years.

I am, of course, aware that Nigerians have allowed themselves to be willingly brainwashed into assuming that there is no nexus between “subsidy removal” and petrol price hike. I hope the truth is becoming apparent now.

For example, in my April 29, 2023, column titled “Six Agenda Items for Tinubu’s Success,” I wrote, among other things: “Don’t increase petrol prices by other names. I know that there is now an artfully manufactured consent, particularly among the gilded classes in Nigeria, about the undesirability of ‘fuel subsidy.’

“I don’t care what it’s called, but any policy (call it deregulation, subsidy removal, appropriate pricing, etc.) that results in an arbitrary and unbearable hike in the price of petrol without a corresponding increase in the salaries of workers and an improvement in the living conditions of everyday people will sink Tinubu.

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“No responsible government shies away from subsidizing the production and consumption of essential commodities for its people. I have lived in the United States, the belly of the capitalist beast, for nearly two decades, and I can tell you that governments at both federal and state levels heavily subsidize petrol consumption—in addition to agriculture.”

In response, a Facebook friend who was inebriated with anti-subsidy propaganda retorted in the comment section: “I beg to disagree on your advice of his administration not removing fuel subsidy which has become [a] cesspool of corruption…. I prefer he use resources saved from its removal on foodstuffs, health and educational facilities as well as increase salaries of workers which PMB has commenced to FG workers with the 40% peculiar allowance to its staff with effect from last January and which arrears was paid with April Salary. Other points raised are apt.”

“At this rate,” I replied sarcastically, “I pray petrol price gets to 1,000 naira per liter so that everyone will get a taste of what I’ve been talking about.”

“Speculation, speculation and speculation!” he shot back. “Govt should be encouraged to put the refineries in good shape and encourage more private investors to build more just as Dangote and Ishiaku Rabiu [sic] are doing. All refineries should be supplied crude oil in naira and not buying in international oil prices in American dollars. Market forces would later force the prices down if monopoly is not allowed to fester just as happened when telecommunication was privatised and mtn simcard was 30k, others like Mtel, Glo, etc forced the price down and now costs next to nothing.”

Two weeks ago, I reminded him of our April 29, 2023, conversation and asked if he still stood by his arguments and what he thought about the N1,000 per liter prediction I made, which he had dismissed as “speculation.” I am still awaiting his response as I write this.

Well, Nigerians were flushed with enthusiasm at the prospect of the operation of the Dangote Refinery. They expected it to help reduce fuel prices, but the monopolistic control of NNPCL and the caginess and opacity of Dangote Refinery itself have spawned a jarring disconnect between expectations and reality.

As I have repeatedly pointed out, Nigeria, as an oil-producing country, should not withhold the reasonable expectation that its citizens benefit from lower fuel prices. To suggest otherwise is akin to giving someone a handful of cream while allowing their skin to remain parched — an act of neglect that borders on cruelty. Nigerians could more easily reconcile with elevated petrol prices if their country were not blessed with abundant oil resources.

Denying citizens the fruits of their nation’s wealth is no different from a wealthy parent who starves their own children while justifying the neglect by pointing to the deprivation of their less fortunate neighbors. Such a parent is not only irresponsible but unworthy of the trust and care of their children.

Farooq Kperogi: Conspiracy of price gouging between Dangote and NNPCL

 

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

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