Dysfunctional NNPCL vs God-sent Dangote Refinery

The relationship between Dangote Refinery, the world’s largest single-train refinery, the potential saviour of Nigeria’s longstanding fuel crisis and the dysfunctional Nigerian National Petroleum Company Limited (NNPCL) has been fraught with contentions, subversion, and sabotage.

Likewise, the deal between the NNPCL and Dangote Refinery has ignited heated controversies over policy inconsistencies, financial irregularities, and the future of Nigeria’s struggling oil industry. The relationship has shown that insane demons do exist in Nigeria.

The first thing that came to light was the Stake Misrepresentation. It all started with a bang, the 20per cent Myth. Reports initially claimed that NNPCL had acquired a 20 per cent stake in Dangote Refinery. The truth? A mere 7.2 per cent. Yet those involved in this deal are still on their seats, no query, no sanctions no firing!

Let it be known that beyond financial irregularities, there’s the looming issue of falsehoods and misinformation. Government officials involved in such high-stakes agreements must adhere to the Code of Conduct Bureau (CCB) regulations, which mandate public officials to avoid conflicts of interest, misuse of public resources, and providing misleading information. Under the Code of Conduct Tribunal, violations can result in severe sanctions, including removal from office.

The second thing was Product Quality Concern, the diesel drama tests result released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) indicated that the diesel produced by Dangote Refinery had a high sulphur content, exceeding 650 parts per million (ppm). However, Dangote Refinery’s own tests on diesel imported by the NNPCL, bought at two separate filling stations, in the presence of National Assembly members and journalists showed a much higher ppm exceeding 1,800 and 2,000 while its own diesel sulphur content is around 87.6 ppm and now it is at 10ppm. Yet the Federal Government has demanded fresh reports to settle the score!

The third thing thrown into the mix was Monopoly Accusations. Dangote Refinery has faced criticism for monopolistic practices and allegedly stifling competition, prompting government intervention to ensure a level playing field. Meanwhile it is the same NNPCL that has come out to say it bought the refined product at ₦N898/litre but has it allowed Dangote Refinery to state how much it sold to it and why it should not sell to private marketers? Is this ‘fair play or foul play’?

The fourth issue that has messed the pot even further and seemingly a scam is ‘Crude Oil Sales in Dollars’. Selling crude oil to Dangote Refinery violate CBN’s Foreign Exchange Manual (2018), the CBN Act of 2007 which mandates transactions within the country involving domestic entities must be settled in naira, the naira is the sole legal tender for all transactions within Nigeria and to ensure fair market practice. It has also contradicted the Nigerian Oil and Gas Industry Content Development Act. They realise they broke the rules and backtracked!

The fifth thing is ‘Pricing Disputes’ at N898/ litre which the NNPCL claim that Dangote Refinery sold to it. This price was significantly higher than the imported product price, leading to public outcry. Dangote Refinery has refuted the claims calling it misleading and emphasizing their adherence to industry-standard pricing. Scammers everywhere!

The sixth annoying item is the Arrangement to Station NNPCL Personnel at the 20 billion united states dollar Dangote Refinery. This has several implications for the refinery’s autonomy such as in; Operational Oversight, this is a 650,000 barrels per day outfit which surpass the combine capacity of the NNPC refineries, do the they have the know-how to oversight Dangote? not forgetting that it was due to inefficiency that led to the un-operational nature of the four refineries. The presence of NNPCL personnel will limit the refinery’s ability to make independent operational decisions. On Regulatory Compliance, is the NNPCL compliant? Surely the refinery sector will not have been in this mess. The Potential for Bureaucracy and Conflict is high, giving the way-laying tactics being perpetrated, the need for approvals and checks from NNPCL personnel will most definitely slow down certain processes, affecting the refinery’s efficiency and responsiveness, thus limiting Dangote Refinery’s flexibility in managing its production and distribution strategies.

The seventh distressing item is the NNPCL’s Struggling Refineries. While this sabotage is taking place, it’s crucial to consider the broader context where NNPCL has poured billions of dollars into repairing its four dysfunctional refineries, with little to show for it. These refineries have not produced a single drop of oil in more than 15 years and astonishingly billions of Naira continue to be spent on the workforce of these refineries despite the facilities being practically a relic.

Additionally, under Nigeria’s Fiscal Responsibility Act and the Public Procurement Act, the ongoing repair contracts for Nigeria’s refineries should be subject to strict oversight. With no accountability for the outcomes nor transparency, the potential for breaches of financial rules, particularly in areas of transparency, fiscal discipline, and accountability is crystal clear.

This unaccountable spending is not only unsustainable but an affront to taxpayers and citizens. Practically Billions of Cash Down the Drain!

In conclusion, Dangote refinery, a private entity, is positioned as the only functionally sane refinery and the sincere player trying to clear the mess created by the NNPCL for Nigeria, Nigerians and future generations yet unborn.

Surely, the NNPC- Dangote deal underscores deeper structural issues and also placed immense responsibility on regulatory agencies like ICPC, the EFCC, DSS and the Code of Conduct Bureau to ensure that public funds and assets are used in a manner consistent with Nigeria’s constitution and financial laws.

Someone or some individuals at NNPCL should bear the cost!

Rabiu is a Monitoring and Evaluation Specialist on Policy, Finance, Risk, Politics, Good Governance and an Advocate for Sustainable Development. He wrote from Kaduna.