This Ticking Time Bomb Is About To Be Ticked Off
Chris Paul Otaigbe 08185591375
May 31, 2023. 10.25pm- June 1,2023. 11.26am
Now that the MUCH AWAITED Dangote Refinery has come on stream, there REALLY should be no NEED for any subsidizing of fuel.
So, in principle, removing fuel subsidy is the logical thing to do.
However, removing it SHOULD have been done, ONLY when the Private refinery has started SELLING to Nigerians, at an EXPECTEDLY CHEAPER price.
Just when you thought it was too early for the new president, Bola Tinubu, to have ANNOUNCED its removal in his inaugural speech as president, the NNPCL FOLLOWED up IMMEDIATELY with ANOTHER abominable fuel price INCREASE!
If truly it was meant to HELP Nigerians, why the RUSH?
If the idea of the price template is to PREPARE Nigerians for an EVENTUAL international pricing of Dangote fuel, in which Nigerians will be buying Dangote fuel at DOLLAR RATES, that would be the GREATEST FRAUD of the century.
NNPC’s 20% stake in the refinery is meant exactly to ENSURE Nigerians buy the fuel cheaper.
I maintain here, that there is ABSOLUTELY no REASON for any petroleum product from Dangote Refinery to sell at anything more than N90 per liter, at the very worst.
You know why…?
Nigerians have 20% SHARE of that refinery; as held in TRUST by the NNPCL.
He is located in Nigeria and government CAN give him crude from its Domestic Crude Allocation (DCA) basket.
He is NOT paying any fraudulent LANDING COST.
Meanwhile, Tinubu knows the fuel subsidy is a scam. The IMF/World bank and the Western governments (their Paymasters) to whose gallery jagaban was playing to, KNOW it is a FRAUD.
As a matter of fact, the fuel subsidy matter ought to have been GIVEN a different Presidential broadcast; where Tinubu will be INFORMING Nigerians of the private refinery’s intervention and how its roll out will OFFICIALLY and PRACTICALLY lead to the NATURAL DEATH of fuel subsidy.
This is what is SUPPOSED to have been done; even by the DUMBEST of leaders/governments; anywhere on earth.
The Nigeria Labor Congress (NLC) President, Joe Ajaero got it correctly; when he said the fuel subsidy removal is an AMBUSH against Nigerians.
Stretching it further, from the perspective of my conspiracy theory oracle, and I pray I’m PROVED wrong; I believe the idea is to FURTHER impoverish the people and QUICKLY too; to DEGRADE their stamina to fight for their mandate, which the new president is ALLEGED, to have STOLEN!
Commissioned on May 23,2023, I believe the refinery could have been LAUNCHED on the same date, two to three years back.
That Aliko Dangote was ALLOWED, finally, to open his refinery for business at the VERY END of Mohammadu Buhari’s eight years of NATIONAL NIGHTMARE, speaks volumes.
My thinking is that those eating the meat, of the Nigerian oil and gas industry, NEEDED the COMFORTABLE environment provided by Buhari’s NAIVETY and DAFT leadership, to FINISH the whole pot; before RELEASING it to Dangote.
Built at a cost of over $18 billion, the 650k barrels per day (BPD) crude processing Plant is capable of satisfying Nigeria’s over 70 million liters per day fuel consumption with enough left to export.
The Plant also has the capability to generate over 12k megawatts of electricity among other STRATEGIC economy-boosting operations it brings to the table.
Once it commences production and distribution, Nigeria will be saving over $11 billion from fuel import.
Meanwhile, between 2021 and 2022 alone, Nigeria spent $11.3b and $10bn, respectively on subsidy; while Dangote refinery cost $19bn to construct.
So, in TWO years, Nigeria WASTED the opportunity to build one 650kbpd refinery.
When you add the $7.5b APPROPRIATED to have been expended on subsidy as at June 2023, we would just be short of $10b for a second 650kbpd refinery.
Since 2015, Nigeria spent over N12 trillion on fuel and petroleum products import and maintenance of the refineries; (N7.9 trillion for Subsidy and N4.15 trillion for repairs of the four refineries).
This money can now potentially be saved with Dangote refinery plugging the supply shortfall.
Currently, Nigeria imports more than 80% of its refined petroleum products.
The largest importer of refined petroleum products in Africa and largest exporter of crude oil in the continent, Nigeria shares similar fate with Mexico which exports its crude abroad for processing.
The most remarkable impact of Dangote refinery will be the increase in local refinery capacity, which will reduce imports.
Dangote refinery is expected to meet 100% of Nigeria’s refined petroleum product needs (Petrol, 72 million litres per day; diesel, 34 million litres per day; kerosene, 10 million litres per day and aviation jet oil, 2 million litres per day), with surplus products for the export market.
The country has faced several fuel shortages in the past, which caused prices to veer VIOLENTLY north for transport and basic commodities.
Refining crude oil locally will enable the country pay for the refined product in naira which will save scarce foreign exchange and generate revenue in exported refined petroleum products.
Allied industries will gain the needed boost to help reduce the cost of production; especially for industries that rely on petroleum products; such as diesel to power their operations.
Consequently, this should increase their competitiveness in the global market while promoting local industry capabilities.
The refinery could also create an environment for allied industries to emerge in and around it, in such businesses as transport, housing and telecommunications; that will benefit from its construction and operations.
While under construction, the refinery employed about 40,000 workers – 29,000 Nigerians and 11,000 foreigners.
The jobs were in engineering, construction, manufacturing and operations, among other areas.
In full operation, the refinery is expected to create over 250,000 direct and indirect jobs.
The country’s current unemployment rate is expected to reach 40.6% in 2023.
My take…
First, on a note of digression…
Billionaire business tycoon, Femi Otedola lamented Late President Umaru Yar’Adua’s reversal of the sale of Nigeria’s four refineries to private individuals such as himself, Dangote among others.
He said government has no business in business.
Need I remind him that, that was the CORPORATE LIE the Olusegun Obasanjo administration and successive governments, (EXCEPT Late Yar’Adua regime) employed to fool Nigerians into believing that only the private sector can deliver the refineries.
Late Yar’Adua REMAINS the ONLY President that has the SINCERITY of heart, to REVERSE pump PRICE of FUEL, till date.
For ANY rational being, that SHOWED a President and Leader who TRULY had GENUINE Love for the people of Nigeria.
Had he LIVED to run his tenure, he would have brought a great degree of SANITY to the nation’s hydrocarbon industry; particularly, the Downstream.
The emergence of Dangote refinery is a perfect ILLUSTRATION of the WICKEDNESS and GREED of Yar’Adua’s predecessors and SUCCESSORS, till date.
If, as PRESIDENT, he could REVERSE fuel price and institute positive and people-impacting REFORMS on the oil and gas industry, SURELY any President can do the same.
In a moment of candor, and in response to the Reporter’s question as to whether he would build the refinery again, if he had a choice next time, Dangote said NO!
He could say NO, because refinery business is NOT for one man to engage in.
In other words, from a developing economy’s perspective, it is really a government thing to do.
In conclusion, I hereby SUBMIT that there is NO fuel subsidy.
Tinubu should ask Mele Kyari, NNPCL Group CEO to EXPLAIN how they export the crude to the Refiner outside Nigeria.
From a template used for the crude oil swap, the process for importing refined petroleum product involves taken part of the crude; that would have been given to the moribund refineries, to FOREIGN REFINING Plants by the national oil company through its Subsidiaries.
The Refiner is NOT paid CASH (physical or electronic).
Rather, the crude itself is used as payment; because the Refiner gets his money from refining and selling of the many DERIVATIVES he can MILK from the crude oil.
As in the Free On Board (FOB) arrangement, the Refiner brings the refined products to the DESIGNATED Port in Nigeria; at his OWN COST!
From here, NNPCL through its relevant subsidiaries take over; for onward distribution to the fuel stations across the federation.
So, from the template given above, it is OBVIOUS that transactions in the process is NOT CASH-BASED but crude oil-BACKED!
Where, then, is the government subsidizing anything that has BLED Nigeria of BILLIONS in DOLLARS?
If there is a DIFFERENT process used, NNPCL should TELL Nigerians, HONESTLY, HOW they conduct the business of refining and importing the fuel from abroad.
It has become IMPERATIVE for NNPCL to OPEN its books for Nigerians to know how this is done and how the country lost TRILLIONS of naira to fuel subsidy.
I hope they will not tell us that RELEASING the information to Nigerians has SECURITY Implications! Lol.
Clearly, in showing himself, as the SUPER president BOLD ENOUGH to YANK OFF fuel subsidy, Tinubu has EXPOSED himself, to the very masses he NEEDS at this time, as their number one ENEMY!
Finally, coming from his highly DISPUTED election, and its attendant TENSION that has put the nation ON EDGE, the ticking time bomb may just have been TICKED OFF!

By osibanews

Eliel Otote A is an Actor and Filmmaker, with a bias for journalism. He was a freelance feature writer with the Nigerian Observer in the 80's in Benin City, he also presented programmes on both radio and television. Eliel is the Editor and Publisher of OSIBAnews Network Magazine, of which this blog is an affiliate.

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