•Aliko Dangote and Farouk Ahmed
The accusations , counteraccusations and rebuttals in the oil and gas business today began on Wednesday, June 12, 2024. This was during the Afreximbank Annual Meetings and AfriCarribean Trade and Investment Forum in Nassau, The Bahamas.
It was there, far away in a foreign land, that Aliko Dangote, the Chief Executive Officer of Dangote Group, suddenly told the world that some local and international criminal organisations he called “mafia” tried tenaciously to sabotage his refinery. He never mentioned such a dire issue in Nigeria prior to that moment.
A shocked nation, stunned oil industry stakeholders and the media waited for Dangote to throw more light into this ominous revelation. But it turned out to be his last word on that foreboding statement.
Next, his Vice President, Oil and Gas at the Dangote Industries Limited, DIL, Devakumar Edwin, further heated up the industry space as he accused The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, of issuing licences indiscriminately to marketers to import substandard, dirty diesel into the country when the Dangote Refinery alone has the capacity to conveniently meet local demands. It was a shot aimed at the heart of the marketers and the NMDPRA.
The Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, could not take this. It promptly debunked Dangote Refinery’s accusation and stated emphatically that Dangote Group’s statement was inaccurate, misleading and capable of causing discord in the industry.
But the NMDPRA, despite this horrendous accusation, seemed reluctant to join issues with Dangote. This was the same Dangote Refinery it had bent backwards to support, allowing the nascent refinery to sell its substandard and even hazardous products when it started production. For while the sulphur content of imported fuel was put at a maximum of 200ppm, Dangote Refinery enjoyed a waiver that allowed it to sell a substandard AGO and aviation fuel with 700ppm to as high as 1200ppm.This, as one industry watcher puts it, “is the authentic dirty diesel, yet NMDPRA supported him because it saw the refinery as a huge indigenous enterprise and desperately wanted to encourage it”.
But NMDPRA just couldn’t accept any deal that would foist monopoly on Nigerians because it understood the dire implications for energy security.
In the words of Dr Ikem Akachukwu, “this is the crux of the matter”.
The Monopoly Issue
“When Dangote was announcing everywhere, in Nigeria and abroad, that his refinery could supply all the fuel and diesel that Nigeria and even West Africa would need, I was suspicious because I know Dangote’s style”, said Dr Akachukwu.
“I knew he wanted to take over the market and shut every other person or company out. He is never comfortable with a fair, healthy competition “, he stressed.
“Dangote needs to build his business on collaboration with all stakeholders; the depot owners, NNPCL, IOCs and international oil traders. “He will never achieve any monopoly in an industry full of strong and powerful players. Lying to Nigerians will not change anything because those in government including Mr President know the truth. “Don’t get me wrong, I absolutely admire Mr Dangote, his passion for Nigeria and his achievements and all. But it can’t always be your way or nothing.
“Hey, you ask BUA ( BUA Cement), ask Ibeto ( Cletus Ibeto, CEO of Ibeto Group ), Dangote did everything humanly possible to force them out of cement business because he always had the backing of nearly every government . But times have changed and he must do business the right way”, he concluded.
Indeed, Dr Akachukwu seemed to echo the clear position of NMDPRA . The regulatory agency, not wanting a confrontation with a company under its supervision, replied Dangote management’s accusation with a rather tamed response. Stressing the Law, it stated that the deregulation of the downstream sector allows the fuel marketers to source petroleum products from anywhere whether locally or internationally. The reason is to avoid monopoly and encourage fair competition. It is a commercial decision, it added.
But it was Professor Obaka, (surname withheld by me) an indigene of Kogi State who bared his mind on the sideline of an event at Federal Palace Hotel, Lagos.
He painted a grim picture of monopoly and the current face-off between Dangote and NMDPRA. The Professor of Geology who has worked vastly in USA and many African countries, warned the government about the destructive dangers of monopoly.
“Like many Nigerians in the US, I know Aliko Dangote”, he started.
“He is an interesting guy but I can tell you his vision and mission in business is monopolistic in nature. And I mean it.
” Do you remember his Dangote Noodles which was part of his Dangote Flour Mills ? He exited the business about seven years back and sold it to Dufil ( Dufil Prima Foods Ltd ). That was because he couldn’t push the guys out. He tried everything. And Buhari’s government couldn’t help him like Obasanjo did.
“So, Nigerians should keep sentiments apart and listen to Farouk Ahmed, because he is a straightforward technocrat. He spoke the hard truth.
As late as three days ago, I saw the certificate from Dangote Refinery. The sulphur content was 920 ppm. And the guy was out there telling Nigerians what he knows clearly is not the truth.
And I know he couldn’t have lied about Dangote calling him to stop the marketers from importing petroleum products. It is typically Dangote’s mode of operation. And Nigerians continue with sentiments and allow a monopoly to happen in the oil business, the nation’s energy security will be dreadfully jeopardized.
In all, from every analysis and every player encountered in the oil and gas industry, especially the marketers and the regulatory authorities, there seems to be an innate admiration for Dangote and an inherent willingness, if not eagerness to do business with his refinery. All that they seem to ask is for this richest man in Africa to adjust his approach to business a bit to make room for fair and healthy competition even as they know he will remain dominant.
They simply want him to reboot, revise and relaunch.
•Gbenga Johnson, an Oil & Gas industry analyst writes in from Abuja.
