A group of concerned Nigerian citizens has called on the Nigerian National Petroleum Company Limited (NNPCL) to prioritize crude oil supply to local refineries, including the Dangote Refinery, over foreign partners.
At a press conference on Tuesday in Abuja, the group expressed concern over reports that the NNPCL plans to reduce its crude oil supply to the Dangote Refinery from 300,000 barrels per day.
In an address by its National Coordinator, Obinna Francis, the group stated that this move is part of a larger plan to monopolize the oil sector and frustrate local investors.
Francis noted that the removal of fuel subsidies has increased hardship and suffering for Nigerians, with the hike in the price of Premium Motor Spirit (PMS) leading to a rise in the prices of goods and services across the country.
Francis argued that the Dangote Refinery has been making efforts to make petroleum products more affordable for Nigerians and that reducing its crude oil supply would undermine this effort.
The refinery’s operations, they noted, are not a burden to taxpayers, unlike the government-owned refineries.
The citizens called on President Bola Tinubu to intervene in the matter, stating that the NNPCL’s actions might be misconstrued as having the president’s consent.
Francis added, “Citizens are no longer surprised that the NNPCL has been insisting that the Warri and Port Harcourt Refineries are operating at 60 to 70 percent of their operational capacity. It is now clear that the initial plan was to pave the way for reducing the crude allocation to the Dangote Refinery.”
“We argue that the upstream operations of the Warri and Port Harcourt refineries should not cut down allocations to local refineries. The naira-for-crude agreement was purely an intervention at the time to boost local production and provide some cushion against the volatility of the foreign exchange market. It was not so much about crude oil but the FX situation.”
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“If the Warri and Port Harcourt refineries are coming online, they should make the price of petrol affordable for Nigerians and not become an obstacle or a basis for adjustments in crude allocation.”
“Citizens also want to inform the world that while the Dangote Refinery operates at no cost to the taxpayer, the NNPCL is embarking on Project Leopard. This project will enable the company to raise $2bn in exchange for crude oil, pushing the volume of crude loan agreements to $8bn within four years, leading to increased debt for the nation.”
“A few months ago, Oando loaned the NNPC $500m as part of another syndicated loan operation called Project Gazelle. Swiss group Gunvor International and Nigeria’s Sahara Energy Resources also participated in the $3.175bn operation arranged by Afreximbank. These deals have continued despite complaints from domestic refineries that the national oil firm is not meeting its quota. As of November 2024, the country’s average daily production stood at 1.8 million barrels.”
“There is overwhelming evidence that the private sector has served the Nigerian public and stakeholders better than government-owned and operated utilities and parastatals. Let us examine two recent examples: the power and telecommunications sectors before we return to the refineries.”
“The federal government sold power-generating companies to the private sector years ago. In the telecommunications sector, the government liberalized the industry in 2001 by selling GSM licenses but retained ownership of the key operator.”
“In each of these examples, continued public sector operation led to billions of naira being lost on poorly managed entities. These entities deprived Nigerians of essential services, fostered corruption, and diverted funds away from vital sectors like education and health. In each case, privatization or liberalization—allowing competition from private businesses—solved the problem and ensured the greater good.”
“Regarding the refineries, we have previously attempted to reverse privatization and retain public ownership of these assets. In 2007, attempts by the administration to facilitate the sale of the refineries were reversed due to pressure from unions, and management renewed its commitment to revamp the refineries.”
“However, in 2011 alone, Nigeria reportedly spent $760 million on refinery maintenance, and the operational capacity of the refineries barely changed. Since the reversal, over $30 billion has been spent on oil subsidies. These sums could have funded the health and education budgets for three years.”
“Under the Greenfield Refinery initiative, the Nigerian National Petroleum Corporation (NNPC), now Nigerian National Petroleum Company Limited (NNPCL), planned a public-private partnership to expand local refining capacity, eventually settling on establishing a 350,000 BPD refinery in Lagos.”
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