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Dangote Refinery Faces Crude Supply Challenges Amid Allegations Against IOCs and Regulators

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In recent weeks, a significant topic of discussion in Nigeria has been the allegations made by Dangote Refinery against International Oil Companies (IOCs) for allegedly obstructing its operations by refusing to sell crude oil directly to it.

According to a statement issued in July, and subsequently reiterated by Alhaji Aliko Dangote himself, the refinery claims that IOCs are favouring Asian countries or their foreign subsidiaries over Nigerian buyers, in defiance of directives from Nigeria’s upstream regulatory body, the National Upstream Regulatory Commission (NUPRC).

Dangote Refinery has asserted that this practice is likely to result in increased prices for its products, as the trading arms are offering crude at prices $2 to $4 per barrel above the official NUPRC rates.

The refinery recently reported that when they attempted to purchase crude for August, international trading arms informed them that their Nigerian crude was included in a tender by Pertamina, the Indonesian National Oil Company, necessitating a wait to determine available quantities.

In addition to these allegations against the IOCs, Dangote Refinery has accused oil marketers of engaging in unethical practices, such as importing adulterated diesel.

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This has led to a surge of patriotic sentiment among Nigerians, who have rallied behind Dangote Refinery, accusing both the Nigerian government and NNPC Limited of undermining a Nigerian-owned business in the oil and gas sector.

However, is the Federal Government truly sabotaging Dangote’s business? Are the claims that the government is conspiring against him accurate, or are they driven more by sentiment than fact? The reality appears to be more nuanced than the allegations suggest.

It is crucial to acknowledge that Alhaji Aliko Dangote has arguably received more governmental support than any other Nigerian businessman.

Since 1999, various administrations have granted him numerous advantages, including waivers that have significantly diminished competition in sectors like food, confectionery, and cement. Competitors such as Ibeto Cement and Lafarge have seen their market shares shrink due to these advantages.

Many argue that without such governmental support, Dangote might not have achieved his billionaire status.

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Addressing the specific claims made by Dangote Refinery, it is important to recognize that the oil and gas sector, like other sectors of the Nigerian economy, has its complexities.

Before the arrival of Dangote Refinery, the downstream petroleum sector had already seen substantial investments from oil marketers, amounting to over N3 trillion.

The entry of the refinery was initially welcomed, with marketers seeing it as a positive development for both Nigerian businesses and the country as a whole.

During a meeting last month, marketers expressed concerns about Dangote’s business model, which involved selling fuel directly through gantry systems and bypassing traditional depots.

Dangote acknowledged these concerns and explained that gantry sales were a temporary measure to clear stock and ensure uninterrupted refining.

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However, the marketers noted that this approach could damage infrastructure and was not as efficient as using established depots across various locations.

The marketers also highlighted a price disparity between local and foreign traders, with the latter obtaining Dangote’s products at significantly lower rates.

Although Dangote promised to address these issues, he later continued his sales practices without changes, prompting marketers to import cheaper diesel from abroad.

This move led to a regulatory dispute, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) initially attempting to block these imports, only for President Bola Tinubu to reverse the decision.

The situation escalated when Dangote accused NMDPRA of licensing the import of substandard diesel, which was contradicted by evidence showing that Dangote himself was producing diesel with high sulphur content.

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This controversy revealed deeper issues within the refinery’s operations and led to further tensions with both marketers and regulatory bodies.

Additionally, Dangote’s recent criticism of NNPC Limited, alleging the importation of adulterated fuel, appears to stem from frustration with the broader challenges facing his business.

Historically, Dangote has enjoyed considerable support from the government, as evidenced by the significant backing received during the construction of the refinery.

Former Central Bank Governor Godwin Emefiele even highlighted that the refinery had repaid a substantial portion of its loan before it was fully operational.

With Nigeria’s crude oil production standing at approximately 1.25 million barrels per day, and various forward sale agreements impacting the available supply, Dangote’s expectations for exclusive access to crude oil have proven unrealistic.

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The government’s commitments to loan repayments and existing agreements have further complicated the availability of crude oil for Dangote’s refinery.

The refinery’s financial challenges are compounded by its inability to secure favourable payment terms for imported crude and the ongoing cash crunch faced by the government.

This has led to a situation where Dangote’s financial capacity is strained, and his options are limited.

Given these circumstances, one viable option for Dangote might be to consider divesting a portion of his shares in the refinery.

This approach has been successfully employed by other businesses facing similar challenges. For instance, Saudi Arabia’s Aramco went public to address financial difficulties, and Microsoft founder Bill Gates sold a significant portion of his stake in the company to navigate legal and market pressures.

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By exploring such a divestment strategy, Dangote could attract additional investment and share the financial burden, allowing the refinery to continue operations despite the current challenges.

This approach would align with practices observed in other successful businesses and offer a potential solution to the difficulties facing Dangote Refinery.


 

Business

Ecobank Announces $250M Capital Boost at Annual General Meeting in Togo

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Ecobank Group is reportedly set to raise up to $250 million through an Additional Tier 1 (AT1) capital offering in order to strengthen the bank’s capital base.

This was revealed during the company’s annual general meeting held in Togo on the 29th of May, 2025. According to the meeting, the bank stated that the conversion price for the shares will be based on the higher of the prevailing exchange rate and the floor price of $0.02 per ordinary share.

The speaker stated “As we cast our eyes into the future and reimagine all possibilities—rising competition from banks, fintechs, and non-bank financial institutions, as well as factors such as geopolitics, regulations, and capital markets—we cannot afford complacency.”


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CBN Assures Nigerian Stakeholders of the Banking Sector Stability and Deposit Security

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The Central Bank of Nigeria (CBN) recently assured stakeholders about the state of the banking sector in Nigeria, stating that the banking sector can still be trusted and is secure.

The assurance was shared in a statement signed by Hakama Sidi Ali, Acting Director of Corporate Communications at the CBN. In the statement, it was emphasized that stakeholders should disregard any negative news concerning the banking sector, as such reports are misleading.

The CBN also highlighted the security of the deposits entrusted to it, stating, “There is no reason for the public to worry about the security of their deposits.” The extent of the measures and security in place was also emphasized by the director in the statement.


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“Aliko Dangote is Nigeria’s Biggest Debtor” – Dr. Cosmos Maduka Claims

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Nigerian Businessman Dr. Cosmos Maduka analyzes popular Billionaire, Aliko Dangote and describes him as the biggest debtor in Nigeria.

The businessman highlighted the fact that people who seem to have the most money are often the largest debtors.

“The number one debtor in Nigeria is Aliko Dangote. He’s the wealthiest man in Africa. The number one debtor in the world is the United States of America and you call them the richest in the world.”

“As you admire all of those things, it’s all credit. It’s all about credit. So you should leverage on loan, but you have to have a good structure that will support that loan.”


 

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