Adeniyi Shoremi’s Post

I said exactly the same in my prior post. Federal Government of Nigeria is destroying investors confidence with the Dangote Refinery issue. See 👇 This whole issue on Dangote Industries Limited is shocking and creating bad waves for Nigeria globally - Akinwunmi Adesina of African Development Bank Group Monopoly often exists where there are high barriers to entry or high capital costs. How many individuals or companies can do railways? How many can do refineries of the scale of Dangote Refineries? In a nation that has been importing refined petroleum products for several decades, the abnormal simply became very normal. No smart investor would make a $19.5 billion investment and want it to be undermined by importers. To manufacture is extremely expensive and risky. This is even more so in Nigeria, given the very challenging business and economic environment, fraught with policy uncertainties and policy reversals, and where the self-defeating default mode of "simply import it" is always so easily rationalized and chorused to solve any problem. Competition is good for everyone. But is Dangote refineries anti-competitive? What is the evidence? Has Dangote refineries prevented any other company from setting up refineries? Why have others not done so? How come they have not done so for several decades? Was it Dangote that held them back? But Dangote refineries surely cannot be asked to 'compete' with importers of petroleum products. That is not competition. Let the importers set up local refineries and compete by refining in Nigeria. That is fair and justified competition.

My question remains, why are we over flogging this issue of competition?it's only expected that the importers run out of business in no time once Dangote refinery commences operation in full gear going by basic economic principles of sourcing primary and secondary factors of production locally. If importers decide to cut corners by importing substandard products just to compete in pricing, the regulatory bodies will sanction them, indirectly they are out of business. Dangote refinery will still thrive and run it's "importers" competition aground naturally. Personally, I don't feel it's healthy for the government to come out publicly that it's banning importation of petroleum products because of Dangote Refinery. These same person's will still say Alhaji enjoys government indused monopoly. Naturally, any entity that intends to compete with Dangote refinery will have to tow thesame path of refining locally. Only reason imported substitute can thrive is if there's a compromise on the part of the regulators.

The Nigerian government seems just to have a way of ensuring that the Nigerian Economics is strictly 'Nigerian'. Still on this Dangote refinery issue, honestly I'd hoped that it was going to cause fall in prices of petrol and related products even if it's not going to be as significant as many hoped. But when I realized that NNPC was to be the exclusive buyer of the fuel from Dangote, I suspected an an unusual play. Apparently, Dangote has relinquished the power to fix its own oil price to NNPC. Why can't oil marketers carry fuel directly from the refinery instead of going through NNPC as the middleman? NNPC is likely becoming a big monopsonist. My thought is that Nigerians will likely end up paying the same price as if they fuel was being imported. So having the refinery around may not make much difference in the lives of the average Nigerian citizen. It might be the case that Dangote just got 'settled' so he will cry no more and protect or at least benefit from his investment.🥲 I'm open to different views though especially if you have the facts.

While having our refineries operational may seem like a solution, it's important to note that domestic refining doesn't automatically translate to cheaper fuel. The cost of crude oil, maintenance, and operational efficiency still influence prices. Government-owned refineries have historically been inefficient, requiring heavy subsidies and constant bailouts. Instead, a better approach might be privatizing these refineries, allowing more efficient management and reducing the financial burden on the government. Additionally, converting vehicles to Compressed Natural Gas (CNG) should be made more affordable. Nigeria has abundant natural gas resources, and incentivizing the use of CNG can offer a cheaper, cleaner, and more sustainable alternative to petrol, reducing our dependence on imported fuels while saving citizens money in the long run.

Does it mean that the Federal Government of Nigeria will ban importation of fuel? Beautiful development, will it be extended to all products produced in Nigeria to create a fair competition for the Nigerian producers e.g. ban importation of vehicles, INNOSSON produces vehicles locally. Who knows, this debate may resolve many contradictions in the Nigerian economy.

Where is the fair advantage, if you are taking the product to go refine in another country and you are buying in same conditions with the person refining in the country of crude producer/owner. Nigerian citizens can not become a perpetual slaves. We were given school and we have attended the schools and gained quality education, even in some cases in same class with the so called westerners and we beat them in class with wide margins. So what is the fundamental difference that they can not allow us to fix our problems without intervention. What is the reason our fathers and our current leaders can’t believe in our ability to fix our country and continent Africa. Economic has a principle and now that we have learnt the principles do we still need calculators, even if need calculators the invention was not far from African. History told me about Thomas Fuller. There is a new way to think, Africa arise above your challenge.

Crude Oil Quota Allocation to Host Community for Niger Delta Oil Refiners Association Though it is difficult to manage the level of greed and selfishness in Nigerian society, yet, if it could be possible to regulate the population of local crude oil refiners in the Niger Delta, set up special teams of engineers and scientists in the refining industry from various reputable Nigerian tertiary institutions, integrate the engineering, science faculties with the Niger Delta local oil refiners to modify their traditional processing method using our scholars in that stead, I assure Nigerians that all these problems of shortage or scarcity of petrol and gimmicks of NNPC will be over. After all, Nigerians know that those Niger Delta refiners have been doing great, even, we leveraged on their output all these periods of laxity by NNPC. So, why are we pretending as if this is false? Is it because this local production is situate in the Niger Delta of Nigeria? GOD HELP Nigeria 🇳🇬

Breaking: President Tinubu offers lifeline to Dangote Refinery, NNPC to sell crude to it in Naira To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira. Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four. But the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as pilot. The exchange rate will be fixed for the duration of this transaction. Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.

Breaking: President Tinubu offers lifeline to Dangote Refinery, NNPC to sell crude to it in Naira To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira. Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four. But the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as pilot. The exchange rate will be fixed for the duration of this transaction. Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.

Breaking: President Tinubu offers lifeline to Dangote Refinery, NNPC to sell crude to it in Naira To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira. Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four. But the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as pilot. The exchange rate will be fixed for the duration of this transaction. Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.