Aliko Dangote, chairman of Dangote Industries Limited, says the Nigerian National Petroleum Company (NNPC) Limited’s $1 billion investment in the refinery is a drop in the ocean.
On December 16, NNPC said its $1 billion crude-backed loan was instrumental in supporting the refinery during liquidity challenges.
Responding, Dangote refinery denied experiencing liquidity challenges when the national oil company invested $1 billion to support the plant’s construction.
In an Arise TV documentary video on Monday, the billionaire said the contribution was a fragment of investments in the refinery.
“In 2021, when we signed the agreement, even if you give us $1 billion, $1 billion is a drop in the ocean in a $20 billion refinery,” Dangote said.
“When NNPC said ‘give us one more year, we want to change the agreement, we would rather pay you cash,’ because people don’t really understand this issue about $2 deduction on the crude.
“Can we make sure that there’s clarity around it? So what do you want? So they said they would pay us cash, and we should give them one more year.
“We gave them one more year. So from June last year to June this year. So on June 4th or 5th, I called NNPC and they gave us a week.”
Dangote said sometime later, the NNPC decided to back out of the transaction abruptly when the payment was due.
“I said, okay, fine. We just walked away and we just continued. But we still went ahead, we finished our refinery. Our refinery is operating,” he said.
Speaking further, Dangote said it is very “cheeky and nasty for the person who ever came up with that nonsense, saying that NNPC gave us $1 billion to assist us in our liquidity crisis”.
He added that “it’s totally not true; these are just a bunch of lies”.
In September 2021, NNPC acquired a 20 percent interest in Dangote refinery for $2.76 billion.
NNPC paid $1 billion upfront in cash, with a balance of $1.76 billion expected to be paid for in crude supplies.
However, on July 14, Dangote said the national oil company now owns 7.2 percent stake in the refinery.
On August 13, NNPC confirmed it reduced the stake to invest in compressed natural gas (CNG).
Speaking on why the Dangote refinery reduced the ex-depot petrol price to N899.50, Dangote said it was a response to market realities.
“It is a refinery where we invested over $20 billion and I think we have to try and protect our interests and also our investments,” the business tycoon said.
On December 19, the Dangote refinery reduced the ex-depot price of its petrol to N899.50 per litre.
Similarly, the refinery partnered with MRS Oil Nigeria Plc filling stations to sell petrol at N935 per litre.
Dangote said when the country imports petroleum products, there is more pressure on foreign exchange (FX).
“40 percent of our demand on foreign exchange is through people dealing in petroleum products and the more we allow imports to come in — not because I do not want imports — the more we keep using most of our foreign exchange out of the country,” he said.
“Majority of those letters of credit open for petroleum products, the goods are not coming into Nigeria.
“There is nothing you would do that you won’t get criticism for. But I think we cannot also control people from saying their minds.”
Dangote reiterated that he was open to criticism, adding that in the history of Nigeria, in the last 100 years, “nobody has put in $20 billion in any project”.
