A scapegoat called Dangote, By Wole Olaoye

Aliko Dangote

The rich also cry. I have seen wealthy and successful people break down in tears and despondency. You would think that some people have everything made in their favour; the sun smiles at everything that they do. The gods are queuing to crack the rich man’s kernels lest he bites his tongue while attempting the simple task.

Until very recently, Aliko was a synonym for good luck while Dangote could be used interchangeably with the word, wealth. Every Nigerian government, military or civilian, pampered the cement mogul. The Kano lad who rose from anonymity to become Africa’s richest businessman has never failed to fascinate, not just with his famed humility but also with his ability to empathise with the lower cadres of society and fund causes designed to uplift the economically marginalised.

I do not delude myself for a minute that Aliko Dangote is a saint. That is not a quality required of businessmen. I won’t yoke any billionaire with that additional burden. But I can’t describe him as a sinner either, because I don’t have any evidence to that effect. I do, however, have evidence that the man is a patriot, all things considered. It takes somebody who loves his country to invest the bulk of his vast wealth in the country of his birth when those funds could have been working for him in more predictable capitalist climes.

Given what the billionaire has gone through since it became apparent that his petroleum refinery was coming on stream, I often wonder what we would be telling budding investors who are watching the disgraceful drama about patriotism and investing at home. If Dangote could be treated as shabbily as he has been treated (that’s the consensus among Nigerians on social media) what hope does a less connected mortal have?

Doubtful ‘Experts’

The first shock was delivered by the NNPCL. Then followed other players in the industry. Suddenly, the same ‘experts’ who had told us that most of our problems would be solved with the coming on stream of the Dangote Refinery, are now saying that Dangote is operating a monopoly. The same people who could not operate the government’s refineries successfully in spite of trillions of Naira thrown at the problem are now trying to teach Dangote how to operate his refinery and how to price his products.

I became suspicious of the sudden pretensions of patriotism by petrol retailers and their accomplices at the NNPCL who were presiding over the inflated figures of local consumption in the days of ‘subsidy-gate’. Now that we are likely to know the exact quantity of petroleum products locally consumed, the retailers have suddenly put on the garb of our defenders against high prices. When the going was bad, they fleeced us. Now, with a private refinery, they still want to determine the price. Dangote has 500 million litres of products sitting in the belly of his storage tanks while the retailers are mounting a strident media campaign.

With defenders like these retailers, we don’t need leeches. We may not be ‘experts’ but we are not as dumb as some of them think we are.

When the $20 billion refinery began operations last January, it was unable to get adequate crude supplies from Nigeria where a cocktail of vandalism, sabotage and corruption have discouraged new investments that could have scaled up production. When it could no longer continue pretending that all was well, the Dangote Refinery said oil majors were blocking its access to locally produced crude and the regulator was allowing fuel traders to import high-sulphur gasoil thereby undermining its refinery.

Apples and Oranges 

To the layman, the high-sulphur gasoil can be identified by its off-white to golden and brownish colour while Dangote’s top grade product is sparkling colourless.

The head of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the downstream regulator, had tried to convince the expectant world that the Dangote Refinery was 45 per cent completed hence unable to meet Nigeria’s needs. He also said gasoil processed by the refinery was between 650 to 1200 parts per million of sulphur, thus inferior to imported products. That claim turned out to be untrue. (Nigerian regulation allows for the sulphur content in gasoil to be about 50 ppm and is set to begin enforcing the standards from next year.)

When some legislators visited his refinery, Aliko Dangote seized the opportunity to invite them to witness a test of the gasoil from his plant as compared with others sold in the local market. The result showed that Dangote Refinery’s diesel had a sulphur content of 87.6 ppm, whereas the other two samples showed sulphur levels exceeding 1800 ppm and 2,000 ppm, respectively.

Although the issue of pricing was escalated by the petroleum marketers to give the impression that they were fighting on the side of the people against Dangote’s greed, intelligent listeners asked the simple question: Are they talking about the same product? If a marketer currently imports gasoil with sulphur content of 2,000 ppm and fraudulently claims that Dangote’s product is more expensive than imported fuel, such a marketer should be asked if we are actually comparing the same products? It is totally conceivable that an ‘inferior’ imported product laden with a sulphur level of 2,000 ppm would necessarily be cheaper in any currency than Dangote’s well refined colourless liquid. 

The National Assembly should be commended for trying to unravel the maze, but those hallowed chambers, too, took some oily bashing as allegations of influence peddling rent the air. In the House of Representatives, the member representing Ideato North and South Federal Constituency of Imo State and House Committee Chairman on Downstream Petroleum, Hon. Ikenga Ugochinyere, had to openly deny allegations that he gave $1.7 million to the House leadership to secure the committee Chairman position. 

In the village square of social media, truth be told, Nigerians would rather buy a used idea from Dangote than from NNPCL. That is why the government agency is struggling to sell its point of view. The public, who are supposed to be the beneficiaries of cheaper petrol prices are unpacking the issues rather than accept NNPCL’s explanation hook, line and sinker as used to be the case.

Executive Order 

Unless President Tinubu uses his executive order to rein in those who have encamped in trenches to sustain the current uncertainties in the oil sector, we may still be in for a long haul for the following reasons: 

NNPCL’s announcement that it would not be the exclusive buyer of gasoline produced by the Dangote oil refinery could complicate the 650,000-bpd capacity refinery’s strategy to supply gasoline in Nigeria. This has already led to pricing disputes in a fragmented market dominated by local champions.

The Dangote refinery has accused the downstream regulator of issuing licenses for the importation of substandard fuels, while criticising the upstream regulator for not enforcing laws that mandate oil producers to supply crude to domestic refineries.

Nigeria’s regulatory environment is unpredictable. It has been argued, for example, that although the Dangote refinery is located in a free trade zone, which facilitates exports, the Nigerian government controls export regulations.

We all owe a debt of gratitude to those who belled the cat of local refining before Dangote. The future belongs to the Waltersmiths of this world who are doing great things quietly and showing investors that Nigeria could be a happy destination if we all lived by the rules.

My worry about the ongoing petroleum roulette is its implications for the future. If Dangote’s refinery falters on account of a perceived gang-up, you can kiss tomorrow’s potential mega investments goodbye. Already, Dangote has announced that he is no longer proceeding with an investment into steel production in Nigeria due to allegations that he is seeking to be a monopoly.

When the stories of these times are told, unborn generations may wonder why, how and wherefore we allowed the wrong signals to be front-loaded by glorified middlemen to stultify future international investments . Talk of choosing the wrong scapegoat!

Wole Olaoye is a Public Relations consultant and veteran journalist. He can be reached on wole.olaoye@gmail.com, Twitter: @wole_olaoye; Instagram: woleola2021.