Alhaji Aliko Dangote, president of the Dangote Group, has expressed scepticism about the likelihood of the state-owned refineries in Port Harcourt, Warri, and Kaduna reopening. He added that the refineries, which are run by the Nigerian National Petroleum Company Limited(NNPCL), had refused to operate despite squandering up to $18 billion.
Following a visit of the Dangote Petroleum Refinery in Lekki, Lagos, the billionaire entrepreneur gave a speech on Thursday while entertaining participants of the Lagos Business School’s Global CEO Africa.
Dangote claimed that the 650,000-capacity Dangote refinery, which he constructed after the late President Umar Yar’adua’s administration abandoned his plans to acquire government refineries, now produces more than 50% of its output in the form of Premium Motor Spirit (petrol), while even government refineries only devote 22% of their output to this product.
Dangote stated that in 2007, just months after former President Olusegun Obasanjo stepped down, he and his team had to surrender the refineries to Yar’adua.
He added that as a parting gift to him, the former refinery managers had informed Yar’Adua that Obasanjo had sold the facilities below their costs.
“The refineries that we bought before, which were owned by Nigeria, were doing about 22 per cent of PMS. We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government.
Dangote’s statement supported Obasanjo’s remarks from the previous year on the refineries, two of which were closed once more following their declaration of operation in Q4 2024 by Mele Kyari, the former NNPC Group Managing Director.
International oil firms like Shell had previously declined to manage the facilities when he asked them to, according to Obasanjo, who claimed that the NNPC was aware that it was unable to do so.
Obasanjo claims that several Nigerians, such as Aliko Dangote, previously paid $750 million to acquire the refineries, but Yar’adua, his successor, cancelled the agreement.
“I ran to him (Yar’Adua), I said, ‘You know this is not right’. He said, ‘Well, NNPC said they can do it.’ I said, ‘NNPC cannot do it,’ I told my successor that ‘the refineries, from what I heard and know, will not work and when you want to sell them, you will not get anybody to buy them at $200m as scrap’. And that is the situation we are in.
“So, why do we do this kind of thing to ourselves? NNPC knew that they could not do it, but they knew they could eat and carry on with the corruption that was going on in NNPC. When people were there to do it, they put pressure. In a civilised society, those people should be in jail,” Obasanjo had stated.
In January, Obasanjo said, “I was told not too long ago that since that time, more than $2bn have been squandered on the refineries and they still will not work.
“If a company like Shell tells me what they told me, I will believe them. If anybody tells you now that it (the refinery) is working, why are they now with Aliko (Dangote)? And Aliko will make his refinery work; not only make it work, he will make it deliver.”
The recent shutdown of the 60,000 barrels per day old Port Harcourt refinery, six months after it was declared operational, heightened calls for the privatisation of the government-owned refineries under NNPC’s supervision.
A month after Mele Kyari, the former Group Chief Executive Officer of the NNPC, announced it was open in December, the Warri refinery was likewise shut down. The Nigerian Manufacturers Association urged the Federal Government to sell the refineries, claiming they were a financial burden on the nation.
On the grounds that the refineries were a liability and a burden to the government, crude refiners also suggested that the government sell the refineries as scrap and use the money raised to finance modular refineries.
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