Aliko Dangote, chairman of Dangote Industries Limited, says the Nigerian National Petroleum Company (NNPC) Limited’s $1 billion investment in the refinery is a drop in the ocean.
On December 16, NNPC said its $1 billion crude-backed loan
was instrumental in supporting the refinery during liquidity challenges.
Responding, Dangote refinery denied experiencing liquidity
challenges when the national oil company invested $1 billion to support the
plant’s construction.
In an Arise TV documentary video on Monday, the billionaire
said the contribution was a fragment of investments in the refinery.
“In 2021, when we signed the agreement, even if you give us
$1 billion, $1 billion is a drop in the ocean in a $20 billion refinery,”
Dangote said.
“When NNPC said ‘give us one more year, we want to change
the agreement, we would rather pay you cash,’ because people don’t really
understand this issue about $2 deduction on the crude.
“Can we make sure that there’s clarity around it? So what do
you want? So they said they would pay us cash, and we should give them one more
year.
“We gave them one more year. So from June last year to June
this year. So on June 4th or 5th, I called NNPC and they gave us a week.”
Dangote said sometime later, the NNPC decided to back out of
the transaction abruptly when the payment was due.
“I said, okay, fine. We just walked away and we just
continued. But we still went ahead, we finished our refinery. Our refinery is
operating,” he said.
Speaking further, Dangote said it is very “cheeky and nasty
for the person who ever came up with that nonsense, saying that NNPC gave us $1
billion to assist us in our liquidity crisis”.
He added that “it’s totally not true; these are just a bunch
of lies”.
In September 2021, NNPC acquired a 20 percent interest in
Dangote refinery for $2.76 billion.
NNPC paid $1 billion upfront in cash, with a balance of
$1.76 billion expected to be paid for in crude supplies.
However, on July 14, Dangote said the national oil company
now owns 7.2 percent stake in the refinery.
On August 13, NNPC confirmed it reduced the stake to invest
in compressed natural gas (CNG).
‘WHY DANGOTE REFINERY
REDUCED EX-DEPOT PETROL PRICE TO N899.50’
Speaking on why the Dangote refinery reduced the ex-depot
petrol price to N899.50, Dangote said it was a response to market realities.
“It is a refinery where we invested over $20 billion and I
think we have to try and protect our interests and also our investments,” the
business tycoon said.
On December 19, the Dangote refinery reduced the ex-depot
price of its petrol to N899.50 per litre.
Similarly, the refinery partnered with MRS Oil Nigeria Plc
filling stations to sell petrol at N935 per litre.
‘WHY I ADVOCATE FOR
DOMESTIC PRODUCTION’
Dangote said when the country imports petroleum products,
there is more pressure on foreign exchange (FX).
“40 percent of our demand on foreign exchange is through
people dealing in petroleum products and the more we allow imports to come in —
not because I do not want imports — the more we keep using most of our foreign
exchange out of the country,” he said.
“Majority of those letters of credit open for petroleum
products, the goods are not coming into Nigeria.
“There is nothing you would do that you won’t get criticism
for. But I think we cannot also control people from saying their minds.”
Dangote reiterated that he was open to criticism, adding
that in the history of Nigeria, in the last 100 years, “nobody has put in $20
billion in any project”.
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