Nigerian industrial magnate and chairman of Dangote Group, Aliko Dangote has said that Nigerian National Petroleum Company’s decision to reduce its stake in Dangote Petroleum Refinery to 7.2 percent is a big mistake.
Gatekeepers News reports that Dangote said this while speaking during an interview with Bloomberg TV on Monday.
Before this, NNPC had in September 2021, acquired 20 percent interest in Dangote refinery for $2.76 billion.
On July 14, 2024, Dangote revealed that the national oil company now owns a 7.2 percent stake in the refinery.
Speaking on the situation yesterday, Dangote said he couldn’t comprehend why the national oil company reduced its stake when his refinery gave it a good deal.
He said, “We said, okay, fine, we structured an agreement. The first agreement was that they were going to pay us $1 billion.”
“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 that the NNPC wanted the agreement to be restructured so that they could pay cash in exchange for the stake.
He said, “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.”
“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 further said that the premium motor spirit (PMS), also known as petrol, sold by his refinery to NNPC was 15 percent cheaper than the imported product.
Recall that NNPC began lifting petrol at Dangote refinery on September 15, 2024. It also announced that it bought petrol from the refinery at N898 per litre.
However, Dangote refinery countered the claim, saying it is misleading and mischievous.
Speaking on their disagreement, Dangote said the back and forth between the refinery and the NNPC “wasn’t really a disagreement, per se”.
He added that at the time NNPC purchased PMS from the refinery, the national oil company also imported petrol.
The businessman said, “NNPC bought from us on the 15th of September at the international price, they also imported about 800,000 metric tons of gasoline.”
“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.”
“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 affirmed that everybody would adapt to the situation.
