Explain to Nigerians ‘forced marriage of inconvenience’ between Dangote Refinery, NNPC, Majeed Dahiru tells Tinubu’s government

“So, I think that the government’s inconsistency in the first place of not allowing Dangote to sell to willing buyqers as a willing seller that is supreme is also confounding.” While Dahiru acknowledged the importance of transitioning to more sustainable energy sources, he stressed that the government has not developed the capacity for such a transition.

Nigerian news columnist, Majeed Dahiru, has said that the Nigerian government should properly explain to Nigerians the reason for what he referred to as a “forced marriage of inconvenience” between the Nigerian National Petroleum Company Limited (NNPC) and the Dangote Refinery.

The columnist said this in an interview with ARISE NEWS on Friday September 20, 2024 while discussing the ongoing petrol price feud between the NNPC and Dangote Refinery, where he said he does not see the point of this relationship as it does not seem to be of any benefit to Nigerians.

Dahiru, criticising the government’s lack of transparency, said, “Until we have an alternative to petrol, the point I am making is the energy product that we are utilising today must have availability component to it, accessibility, as well as affordability. And affordability entails government intervention in pricing, as it is done all over the world.

“Whatever energy mix you decide to use anywhere in the world must have government intervention in pricing. It is something we’ve run away from for so long, and it has gotten us into a lot of trouble.

“However, this government has decided to deregulate it, and I’m saying it owes the public a clear explanation as to this arrangement with Dangote and NNPC that seems not to be working well. There is so much acrimony.

“It looks like Dangote is seeing NNPC as a foe rather than a friend. And so, we need to understand why we are having this forced marriage of inconvenience in the first place that is about to create petroleum products scarcity.”

Dahiru went on to question the rationale behind NNPC being the sole buyer of refined products from Dangote’s refinery, instead of allowing a market-driven system.

He said, “With the coming on stream of Dangote refinery, one would have thought that it would be a willing buyer/willing seller between the promoters of the refinery and marketers in Nigeria which includes NNPC trading. But curiously, an arrangement was actually brought forward where NNPC will be the sole offtakers from Dangote’s refinery.

“That is very curious because I do not know of one benefit that will bring to the Nigerian people. And from the revelation of the pricing template by the NNPC, it is clear that Nigerians are buying this petroleum product that it is taking delivery of from the Dangote refinery as a premium, because not only have we seen an increase in price, we are also seeing a margin in the pricing template which suggests that probably, this is not a subsidised product.

“So, the question will now be why this marriage of convenience between the NNPC and Dangote refinery which seems to be sitting well with the promoters of Dangote Refinery.”

Dahiru also highlighted concerns over the availability of petrol, citing reports of a recent supply shortfall. He warned that Nigerians could soon face both unaffordable prices and unavailability of fuel.

He said, “Beyond the pricing issues and the back and forth of the pricing is even the much talked about issue of availability. So, in addition to the pricing dispute, there’s also a dispute about availability from the supply side.

“Whereas Dangote has disputed the price that was advanced by the NNPC, it has not come forward with its own price. I mean, somebody has bought products from you, if you claim that the price at which the buyer has made public is what the costs of the products are, then you should immediately tell the public what the cost of your product is, at what cost did you sell to the buyer.

“We also have a bigger problem now with even supply- according to reports in major Nigerian newspapers, it is being suggested that rather than taking delivery of 25 million litres a day as agreed in the arrangement between the NNPC and the Dangote Refinery, there seems to be a shortfall in the last 3 days, almost 5 million litres from the supply side.

“So, all of these issues are worrisome because it means that right now, Nigerians are grappling with unaffordability of the product and imminent unavailability, because if the shortfall continues in the next coming days, we’re likely to see the return of queues, and they’ll be longer and more agonising because of the unaffordability component of this whole issue.

“So, I think that the government’s inconsistency in the first place of not allowing Dangote to sell to willing buyers as a willing seller that is supreme is also confounding.”

While Dahiru acknowledged the importance of transitioning to more sustainable energy sources, he stressed that the government has not developed the capacity for such a transition, saying that, “The reality is that as at today, the government has not developed that capacity. It’s not consumers like us or citizens like us that have that responsibility to develop such capacities as alternatives to petrol or hydro carbon energy derivatives,” he said.

He then emphasised the need to keep petrol prices within an affordability threshold, given Nigeria’s economic realities as he said, “We should stick with what is within affordability threshold. Nigeria is a N30,000 minimum wage a month country, and petroleum price is at N1,000. Given the importance of petrol in driving our economy, in driving the logistics of our economy, it’s way beyond the affordability threshold, but that’s a different ball game.

“I am saying that the government that purports to have removed subsidy and is hell bent on deregulating the system should not come up with this, otherwise, they should state it clearly that the basis for the relationship between Dangote and NNPC is for the purpose of subsidy. Then, we can begin to investigate whether or not subsidy is useful at this point or otherwise.”