NNPC made big mistake reducing its stake in our refinery, says Dangote

Aliko Dangote, Africa’s richest person, says the Nigerian National Petroleum Company’s (NNPC) decision to reduce its stake in the Dangote Petroleum Refinery to 7.2 percent is a big mistake.

Dangote spoke during an interview with Bloomberg TV on Monday.

In September 2021, NNPC acquired a 20 percent interest in Dangote refinery for $2.76 billion.

However, on July 14, Dangote said the national oil company now owns 7.2 percent stake in the refinery.

Speaking on the situation, Dangote said his refinery gave NNPC a good deal so it is confusing why the national oil company reduced its stake.

“We said, okay, fine, we structured an agreement. The first agreement was that they were going to pay us $1 billion,” he said.

“The deal was about $2.79 billion. And then the balance of the money, $1 billion, which they paid us over a year and a half ago, and then the balance of the money was split into two.

“One portion was that every crude they supply to us, 300,000 barrels per day, we’ll deduct $2 and then up to the time they finish paying that, one third. The other one-third will come out of their own profit. So, why NNPC opted out is a little bit confusing.”

Dangote said the NNPC wanted the agreement to be restructured so that they could pay cash in exchange for the stake.

“So, we said, okay, fine. We signed another agreement, cancelling the other one. The new agreement that we signed was for them to pay us after one year, with no interest. After one year, they’ll pay us the balance of $1.8 billion,” he said.

“The month for them to pay was June. And by June, they came back to us and said, no, they’ve changed their minds and they want to remain at 7.2 per cent.

“So, okay, fine. So, we left it and we now own the rest of the shares, they own 7.2 per cent. And that is what it is. I think they made a big mistake.”

Dangote added that there is no longer any sort of negotiation between both parties, adding that the agreement is “finished, dead, and completed”.

‘DANGOTE REFINERY’S PETROL 15% CHEAPER THAN NNPC’S IMPORTED PRODUCT’

Dangote said the premium motor spirit (PMS), also known as petrol, sold by the Dangote refinery to NNPC was 15 percent cheaper than the imported product.

On September 15, the NNPC commenced petrol lifting at the refinery’s gantry after a protracted period of price negotiations.

The development followed the deployment of a fleet of NNPC trucks to the refinery on September 14.

At the close of loading, the NNPC had said it bought petrol from Dangote refinery at N898 per litre.

However, the Dangote refinery countered the claim, describing it as “both misleading and mischievous”.

Speaking during the interview, Dangote said the back and forth between the refinery and the NNPC “wasn’t really a disagreement, per se”.

Also, the billionaire said at the time NNPC purchased PMS from the refinery, the national oil company also imported petrol.

“NNPC bought from us on the 15th of September at the international price, they also imported about 800,000 metric tons of gasoline,” he said.

“So the one that they bought from us actually is cheaper than the one they are importing.”

He said the announced price was not “really the real price”.

“What they announced was likely what it cost them including profits, and whatever, of which they’ve never added profit to their cost before,” Dangote said.

“And then, the other one is what they imported but the people don’t know how much they spend on importing. But their imported one was about 15 to 20 percent more expensive than ours.

“What they first do is to sell at a basket price or If they want to remove subsidy, they can announce that they’ve removed subsidy.”

Dangote said everybody would adjust to the situation.