Ding-dong between the new kid on the block Dangote Refinery on the one hand, and regulators and state oil company NNPC, on the other, is indicative of the deep rot associated with fuel pricing that has long been described as opaque and messy. There is no easy solution. Unfortunately, the country is grinding to a halt because of the unavailability of petrol.
Aliko Dangote, Chairman of Dangote Refinery may have spoken too soon. A few days ago, when announcing petrol from his refinery would be available within 48 hours of showcasing the sample to the world, he also said a few things that must have sent shivers down the spine of the petrol subsidy mafia that has pillaged Nigeria’s oil resources for more than 30 years.
The businessman said Nigerians have hitherto been served imported low-quality petrol, and that henceforth, the clean petrol from his refinery would save vehicles and the health of Nigerians from the hazards of poor-quality petrol.
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Second, and the most striking, was what he said about subsidy payments that have always been an open secret. Round tripping, which involves collecting money from NNPC for petrol that was not delivered, or under-delivered, will be a thing of the past. The latter declaration must have ruffled quite a few feathers and set alarm bells ringing.
Boasting on the ability to track every tanker of petrol lifted from the refinery, Dangote said that the exact consumption in the country would be known; Nigerians, he said, would no longer be fed exaggerated consumption data. The country has been paralysed since the billionaire’s gambit to put an end to the biggest heist in the history of the country.
A few days after Dangote’s petrol availability announcement, NNPC, without warning, jerked up the pump price of petrol by more than 40 percent. No explanation was given, and no reason was advanced.
The waters have been further muddied by the state oil company releasing statements that appear combative, more or less daring Dangote to do his worst.
Before Dangote’s announcement, the oil downstream regulator, Nigeria Midstream and Downstream Petroleum and Regulatory Authority had tried, albeit unsuccessfully, to besmirch the refinery’s reputation, which led many to wonder: Is its interest in petrol importation, or freedom from petrol importation?
Can petrol from Dangote Refinery retail for less than ₦800/litre? Many seem to think so, basing their assumption on the elimination of freight, and costly refining in European refineries (an engineer in Europe earns an average of ₦142million/annum, whereas the same engineer working in Nigeria earns about ₦36million/annum, a quarter of his European peer), and sale of crude to local refineries in naira, thereby removing FOREX element, as grounds for petrol per litre to cheaper in Nigeria than Europe.
So, is NNPC’s preemptive strike of petrol at ₦900/litre an attempt to put Dangote Refinery in a bind, daring the company to sell petrol sub-₦900/litre?
The question is, why not wait for petrol from Dangote Refinery to hit the pumps before jerking up the price at which the fuel had been sold for more than one year? Is the NNPC not telling us all it knows?
The bigger question, though, is: What would Aliko Dangote do?
Adewole Ojo is the Editor-in-Chief of Meiza Nigeria. He can be reached on adewole.ojo@fourpoints.ng.
