When First Bank of Nigeria, formerly Bank of British West Africa, opened a branch in Kano in 1929, Alhaji Alhassan Dantata, grandfather of Aliko Dangote, deposited 20 camel load of silver coins, making him the first businessman to deposit money into a bank in Nigeria. It is no wonder that Alhaji Aliko Dangote has not only become the richest man in Africa, but has also, among many other business accomplishments, been able to build the Dangote Oil Refinery. It is a 650,000 barrels per day integrated refinery in the Lekki Free Zone, making it the biggest in Africa, and the world’s biggest single train facility. The pipeline infrastructure of the Dangote Refinery alone is the largest anywhere in the world, with a little over 1000 kilometres, to handle 3 billion standard cubic feet of gas per day. It has a 435MW power plant, big enough to handle the total power requirement of the entire Ibadan Disco.
The significance of this massive oil facility to the country cannot be over-emphasised, as Nigeria has been plagued with the importation of petroleum products for over 25 years, despite the country’s huge oil reserves, and its dependence on the exportation of crude oil for foreign exchange. Our internal consumption of PMS (premium motor spirit) had ballooned to well over 70 million litres per day. It is estimated to be actually half that figure, as more than half of the 70 million litres is lost to smuggling, due to the low price of PMS in the country, compared to neighbouring countries.
The Dangote Refinery is a monumental economic achievement, as Nigeria stands to gain so much from it. Foreign exchange spent on the importation and subsidising of petrol would be eliminated. So would the forex spent on the importation on diesel. Nigeria has gambled away a lot of foreign exchange, just to be able to provide diesel and petrol to its citizenry.
With the removal of subsidy on these products, a lot of funds, both in foreign and local currencies, are saved and made available for developmental projects for any prudent government in terms of spending.
Naysayers said the Dangote Refinery wasn’t going to be possible. Some were so certain it was a phantom project. Others believed that it was a white elephant project. Enemies of Nigeria were spewing so much lies and fake news about the realisation of the project. The former President Muhammadu Buhari government believed in the project and the capacity of Dangote, and made a huge investment of about $2.7 billion in the refinery. This has given the federal government a 20% stake in the refinery.
With that investment, the federal government secured an agreement with a first right of refusal to supply crude oil to the plant. This would be important should there be an oil glut across the globe. The NNPCL was able to provide the bulk of the 6 million litres of crude oil needed by the refinery to commence its operations in the production of diesel, petrol, aviation fuel, and liquefied petroleum gas. The production of these distillates of crude oil from Nigerian refineries across the country had been impossible, gulping resources for maintenance and staffing, without a drop of fuel.
Today, the Dangote Refinery is beyond futility, it has become a project with a resounding reality. The refinery has begun the sales of diesel and aviation fuel to independent marketers in the country. The price of diesel has been set at N1,225, which is way below the available market price. Of course, the marketers would mark up the prices with their profits and it is envisaged to bring down the retail price of diesel in the country. It is hoped to have the same effect on petrol when the refinery begins to discharge the product. Dangote Refinery is built to cater for all the petroleum products requirements of the country, with more quantities available for export. The refinery has decided to sell to marketers with a purchase requirement of, at least, 1 million litres, and, yes, they will be paying in naira.
Perhaps if the refinery had come on stream earlier, it may have had an effect on the retail price of petrol. The CEO of Pinnacle Oil and Gas, Robert Dickerman, had recently insisted that the federal government was still paying some kind of subsidy; N1 trillion, he says. It is my guess that the federal government, in view of its stake in the refinery, may be able to channel some energy towards the eventual price of PMS in the country even if marginally.
The Dangote Refinery project is a classical example of what government is to do, regarding the provision of a suitable business environment for enterprises to thrive. Running of businesses by government is a no-no, as citizens bastardise the businesses. Corruption too sets in, and before you know it, you have quite a litany of moribund Industries all over the country. Dangote’s business acumen, guts and patriotism have led him to embark on the largest project in the entire continent.
His business pursuit has saved us from the calamity of fuel importation, and the national disgrace of an oil rich country unable to run a refinery that can cater for our demands. With this refinery, Nigerians will, at least, not be hoodwinked with tales of how millions of dollars would be budgeted for the purchase of non-existent spare parts for the operations of refineries that do not produce vaseline, let alone petrol.
Dangote has scored big with this one. All praise to Allah, Nigeria, finally, has this huge refinery on its shores.
Tahir is Talban Bauchi.
