Africa’s richest, Aliko Dangote has disclosed that the Nigerian National Petroleum Company (NNPC) Limited now owns 7.2% of the Dangote Petroleum Refinery, down from 20% as earlier reported. Dangote made the disclosure at the refinery during a press parley on Sunday. This came after the NNPC failed in its financial obligations.
Dangote further disclosed in the same press conference, “NNPC no longer has a 20 per cent stake in the Dangote refinery. They were supposed to pay their balance in June but have not met it till now. So, they only own 7.2%.”
The NNPC confirmed that and said that its equity investment would be capped at the amount already paid. “The decision to cap its equity participation at the paid-up sum was taken and communicated to Dangote Refinery several months ago,” NNPC spokesperson Olufemi Soneye said.
“NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals.” he added
What You Need to Know
Based off of this, the energy issue is that Nigeria is largely dependent on imported refined petroleum products, and that state-owned refineries lie fallow. This pushes citizens who rely on gasoline for power generation and transportation into dire financial straits since the gasoline subsidy was removed in May 2023, and fuel prices accordingly quadrupled.
Dangote’s refinery, which costs $20 billion and is based in Lagos, came online in December 2023, with installed capacity at 350,000 barrels per day.
By the end of 2024, it should reach the maximum production capacity of 650,000 barrels per day. The refinery has already started supplying diesel and aviation fuel, with petrol supply set to begin in August 2024.
Dangote said that while, at the initial stage, it battled to get Nigerian crude, the refinery had to resort to getting its supply from the US. The company had also lamented that a pledge of Nigerian crude by the NNPC under a $3.3 billion oil-for-loan deal with Afreximbank had encumbered supply.
However, Dangote announced that its crude oil supply issues had been resolved with NNPC and the federal government, paving way for the refinery to start rolling out petrol by August 2024.
Moreover, it would produce 4.6 million tonnes of diesel and 4 million tonnes of jet fuel per annum. There is also a fertilizer plant which would use the by-products of this refinery hence having an additional economic and environmental effect.