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.
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