Dangote’s Cautious Approach Towards The Petroleum Sector

In a recent discussion led by Aliko Dangote, Nigeria’s most affluent billionaire, plans emerged regarding the construction of the country’s largest seaport—an ambitious undertaking that promises to elevate his already expansive conglomerate. However, during a visit by members of the Global CEO Africa to the Dangote Petroleum Refinery, Dangote voiced an unexpected reluctance to dive deeper into the petroleum sector. Isn’t it interesting how sometimes, the most lucrative opportunities come bundled with apprehensions?

This caution may seem paradoxical, especially since the refinery, a cornerstone of his business, is firmly entrenched in an industry that he appears wary of engaging with. It raises questions about the intricate relationship between ambition and caution, particularly when navigating the often turbulent waters of the petroleum sector.

According to Dangote, Nigeria’s daily fuel consumption does not reach the 40 million liters that official figures suggest. This discrepancy has sparked significant debate—how often do we see numbers inflated, perhaps to suit certain political narratives? It’s a reminder that the truth can often be harder to discern than we might hope, particularly in industries burdened by chronic corruption.

Interestingly, this hesitation stems from issues of corruption that have been rampant within the petroleum sector. Dangote articulated his decision to keep his investments at arm’s length from the industry due to these systemic issues. He recounted a troubling period during the gasoline subsidy era when falsehoods about fuel usage figures were employed systematically, all to siphon off state funds. The gravity of this situation leads one to ponder: how deep does the rabbit hole go?

During one instance reported by the Punch, the Nigerian Midstream Petroleum Regulatory Authority (NMDPRA) declared that demand rose dramatically to 50 million liters during the holiday season. This figure stood in stark contrast to Dangote’s own claims of an everyday requirement of around 33 million liters—an astonishing 17 million liter discrepancy. How does one reconcile such divergent statistics? And what might this reveal about the nature of reporting and governance in Nigeria?

Mr. Farouk Ahmed, CEO of the NMDPRA, provided a somewhat reassuring perspective, estimating that Nigeria’s gasoline consumption fluctuated between 45 and 50 million liters. However, even this notice of reduction happened to follow President Bola Tinubu’s controversial elimination of the subsidy, which had artificially inflated numbers in the past. It brings to mind the age-old question: does the end justify the means when dealing with public resources?

In February, Ogbugo Ukoha, the Executive Director of Distribution Systems at NMDPRA, remarked on the implications of this subsidy elimination. He indicated that the adjustment in consumption figures was substantial, decreasing from 66 million liters a day in 2023 to the current estimates. “Following Mr. President’s withdrawal of the subsidy, we’ve witnessed a marked decline, holding steady around 50 million liters,” Ukoha noted. However, Dangote vehemently dismissed these numbers as unrealistic, arguing they misrepresented Nigeria’s actual fuel consumption.

What Dangote Said

In his own assessment, Dangote expressed a firm belief that true daily consumption is closer to 33 million liters. He verified that figures had been artificially inflated in previous years due to the subsidies, which had led to daily demand estimates reaching as high as 90 million liters—a figure that seems implausible given Nigeria’s vehicle numbers. “Real consumption is approximately 33 million liters of petrol,” he stated, skillfully pointing out the astonishing contrast between reality and reported figures.

Interestingly, Dangote also shared insights into Nigeria’s aviation fuel requirements, noting that it demands a mere 3 million liters per day. This relatively low figure, he explained, correlates with the country’s limited number of flights. One cannot help but wonder whether changes in travel frequency will provoke further shifts in fuel consumption metrics.

“To satisfy the fuel needs for petrol, diesel, and jet fuel, we estimate around 46 million liters would be required, especially considering that we will produce a staggering 104 million liters daily,” Dangote asserted with an obvious air of confidence. How does such a discrepancy reflect on your own industry’s projections, especially when considering a venture into high-stakes markets?

In another compelling assertion, he claimed that instead of the reported 14 million liters used by the NMDPRA, only 10 million liters were reportedly consumed. Adding to the overall narrative, Dangote projected that the refinery is set to yield 34 million tons of petroleum annually, with an export capacity of 58 million liters. It’s a colossal undertaking, yet it serves to reinforce his sentiments about the systemic challenges in the sector.

Moreover, Dangote went further to characterize the petroleum business as a “mafia business,” a statement that certainly raises eyebrows. Reflecting on the challenges enveloping the industry, he revealed his hesitation to immerse himself in an environment rife with complexities and ethical ambiguities. In an age where corporate social responsibility is increasingly crucial, do we dare to tread the murky waters of sectors comparable to organized crime?

The challenges are profound, and the stakes are higher than ever. As Nigeria grapples with its energy needs while striving to hold leaders accountable, the lessons from leaders like Dangote become critical. They compel us to ask questions, confront uncomfortable truths, and ultimately inspire us to forge a path towards transparency and ethical governance.

In conclusion, while Dangote’s empire continues to grow, his cautious approach to the petroleum sector reveals the nuanced world of business where ethical considerations often clash with financial opportunities. One can agree that in an era focused on integrity, ambition must be paired with responsibility.

Edited By Ali Musa
Axadle Times International – Monitoring.