Crude Oil: Who Wants To Kill Dangote Plant? By David Ikani

Even though people have come to resign themselves to how Nigeria is replete with the theatres of the absurd, it is amazing how no one has come out to dispel the report that the Federal Government plans to cut crude oil supply to the Dangote Petroleum Refinery.

Several reputable media organisations have quoted unnamed sources to report that the Nigerian National Petroleum Company Limited (NNPCL), barring a surge in the current output, would be reducing the current allocation of 300,000 barrels per day to Dangote Refinery.

NNPCL had recently, albeit amid controversy, re-streamed its Port Harcourt Refinery and later added the Warri Refinery, both of which currently operate at a combined capacity of about 135,000 barrels per day. Once the Kaduna Refinery and the second Port Harcourt Refinery resume production, the daily crude requirement for the facilities operated by NNPCl will surge further.

It would seem that the only solution that the people running NNPCL could come up with is to hobble Dangote Refinery by taking away part of its existing 300,000 barrel-per-day allocation to service the restreamed refineries. One would have thought that the NNPCL would have exploited the unanimity of the sources quoted in the reports to walk back this faux pas but it has no intention of doing such, which is a problem.

The problem here is that Nigerians put such failure on the part of the NNPCL to clarify matters down to ineptitude, whereas the reality is that the corporation continues to remind us daily that the oil sector cabal remains in charge. They have simply migrated from rent-seeking, subsidy-stealing addiction to manipulating the industry to frustrate investment and private sector participation so that they can return Nigeria to a regime of fuel importation.

Anyone in doubt that this is the long-term game only needs to historically review the shenanigans that have dominated the sector since Dangote Refineries began operations. This must, of course, be taken against the background of that profound pronouncement that President Bola Tinubu made during his inauguration on May 29, 2023, when he famously declared that “Subsidy is gone”. Since the Dangote Refinery production, NNPCL has created needless controversy over crude supply to the facility, naira sale of crude, the quality of the products from the refinery, continued importation of refined products despite local refining capacity, importation of substandard and tainted petrol, subsidy-free pricing of products and a wide array of other issues that amounted to nitpicking.

It bears noting that going by recent revelations, the crude allocated to NNPCL-owned refineries would not necessarily serve the domestic market since they are most likely to export the same as semi-finished products and would then import the finished products. The implication of this is that the crude allocated to NNPCl refineries does not technically qualify as designated as being for local refining since the corporation will send the same to Dubai as it did with the Port Harcourt low-sulphur straight-run fuel oil (LSSR).

These antics, which could have only been sponsored by the cabal running or ruining the NNPCL, are apparently aimed at frustrating Dangote Refinery, crippling local refining capacity and returning Nigeria to the era of a nebulous subsidy regime and spending countless days on the queue to buy petrol. So, it is about what could be stolen from Nigerians by a greedy few who have resolved that their avarice supersedes our right to affordable and accessible petroleum products.

The above assertion brings us to another facet of the problem. When did NNPCL first discover that crude allocated for local refining is no longer adequate for existing capacity? An organisation of this stature must necessarily have a team or teams responsible for projecting the future and making spot-on scenario modelling. Dangote Refinery came on board, and NNPCL-owned refineries are being restreamed, which means that a right-thinking decision maker should be able to flag that the domestic allocation must either be increased or there will be inadequate crude oil to service all the existing refineries – private and public.

Again, one must acknowledge here that the criminal ineptitude at the NNPCL, which allows cabals to call the shots, has ensured that crude oil is stolen and bunkered in the underworld rather than being properly documented and supplied to legitimate refineries.

The essence of the foregoing is to alert Nigerians to ask the question of who wants to kill the Dangote Plant by cutting down the crude supplied to it. This question is pertinent because whoever wants to do this is desirous of forcing all of us back to the fuel queues. Such persons want the country to again resume bleeding critical funds for non-existent subsidies. They also want us to stop enjoying the falling pump prices of petrol, which has been responding to the economic principles of demand and supply – if Dangote has to resume sourcing crude from other countries, then pump prices of petrol and other products will shoot up again.

It is a call for us to collectively demand that the Federal Government mandate NNPCL to clean up its mess, stop crude oil loss to criminals, make crude oil available to a point where the quantity reserved for domestic refining is increased to service all facilities, and stop those of its actions that undermine the industry.

Ikani wrote this piece from Phase 2, Lokoja.