Aliko Dangote said abandoning his refinery was never a viable option because the project was intended to help Nigeria end fuel-subsidy costs of about $10 billion a year. The Dangote Group president said the facility also had to overcome entrenched interests in the country’s oil industry.
Key takeaways
- Nigeria’s fuel subsidies were costing roughly $10 billion annually, according to Dangote.
- His 700,000-barrel-per-day refinery was designed to address a major financial pressure on the government.
- Dangote said oil-sector cartels resisted the project but that their influence had eased after the refinery succeeded.
- The refinery’s initial public offering began on September 14 at N525 a share on the Nigerian Exchange Limited.
Refinery built to challenge subsidy burden
Speaking in a recent interview with Al Jazeera, Dangote said subsidy payments had become a severe constraint for Nigeria’s government before his refinery began operating. He described the plant’s launch as a necessary intervention in a system where officials were paying out large sums based on figures that, in his view, were being generated without sufficient control.
“There was no going back,” Dangote said, arguing that about $10 billion was being lost each year through the subsidy arrangement. He said the government had been under intense pressure while making the payments, but that the refinery had changed the situation by disrupting the established model.
He also said he had confronted powerful cartels in Nigeria’s petroleum industry and had to do so forcefully in order to complete the project and establish its position. Although he regards the refinery’s performance as a victory, Dangote said opposition has not disappeared entirely.
Cartel resistance and public offering
Dangote said the groups challenging the refinery recognised that it had achieved its objective, after which tensions subsided. He cautioned, however, that smaller opponents could still attempt to interfere, describing them as “little flies” that might continue to create disturbances.
His remarks came as the Dangote Refinery launched its initial public offering on September 14. The shares were offered at N525 each on the Nigerian Exchange Limited, known as NGX.
SOURCE: zalebs.com