Aliko Dangote, President of the Dangote Group, has announced that he will pause his plans to invest in Nigeria’s steel industry to avoid accusations of monopolistic practices. Speaking to journalists at the refinery on Saturday, Dangote explained that the company’s board decided against pursuing the steel venture, citing concerns over potential backlash and the risk of encouraging imports.
Dangote urged other Nigerians to invest in the steel sector to help boost the economy, stating, “We don’t want to go into that. Let other Nigerians take the lead because we are not the only ones here. Others may have more resources to invest in our homeland.”
He also reflected on Nigeria’s long-standing issue with petrol shortages, noting that the country has faced petrol queues since 1972. “For 52 years, we have been dealing with this issue. We are ready to start production, and it’s encouraging to see public support,” he added.
Regarding recent disruptions, Dangote mentioned that a fire incident at the refinery had delayed petrol production, which was initially expected to begin in July. He stated that production should resume by August 10 or 12.
Background Context
Last month, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, accused International Oil Companies (IOCs) in Nigeria of hindering the refinery’s ability to procure local crude by inflating prices, forcing the company to import crude from distant countries.
In a training session for energy editors, Edwin highlighted the challenges posed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which he claimed indiscriminately grants licenses for importing substandard refined products. The NMDPRA countered these claims, assuring that it strictly regulates the quality of petroleum products in Nigeria.
Edwin reiterated that IOCs have consistently frustrated Dangote’s attempts to secure locally produced crude oil. In response to comments from the CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), who stated that IOCs are not refusing to supply crude, Edwin argued that IOCs prefer to sell to international traders who then sell at a premium.
The NMDPRA’s Chief Executive, Farouk Ahmed, stated that the Dangote refinery is still in the pre-commissioning phase and has not yet been licensed. He dismissed allegations that IOCs are obstructing the refinery’s operations due to crude supply issues, noting that Dangote has requested a halt to petroleum product imports to direct all marketers to the refinery.
In light of these challenges, the House of Representatives has initiated an investigation into the alleged conspiracy by IOCs against the Dangote refinery, following a motion by Minority Leader Kingsley Chinda. The motion emphasized the need for support from the federal government and regulatory bodies to ensure the refinery’s success.
Refinery Details
The Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, began producing diesel and aviation fuel in January. The first delivery of crude oil occurred in December 2023, with subsequent shipments following. The refinery started supplying petroleum products to the local market in April, and Dangote had previously indicated that petrol production would commence by July.
Additionally, it was reported that the Nigerian National Petroleum Company Limited (NNPC Ltd) had planned to acquire a 20 percent stake in the refinery. However, Dangote revealed that NNPC now holds only a 7.2 percent stake due to its failure to pay the remaining balance of its investment. The NNPC confirmed this reduction in shareholding, attributing it to a reassessment of its investment portfolio.
