Olufemi Soneye, the spokesperson for the Nigerian National Petroleum Company Limited (NNPC), has clarified that the state-owned energy firm has reduced its stake in the Dangote refinery to invest more heavily in Compressed Natural Gas (CNG).
Soneye explained that NNPC capped its stake in the Dangote refinery at 7.2 percent instead of the initially planned 20 percent to focus on building CNG stations across Nigeria. He shared this information during a session on Berekete Family Radio, a video of which was reviewed by our correspondent on Monday.
When asked about allegations that NNPC was collaborating with the Nigerian Midstream and Downstream Regulatory Commission to undermine the Dangote refinery, Soneye firmly denied such claims. He pointed out that NNPC would not sabotage a company in which it holds a 7.2 percent stake.
Soneye emphasized that NNPC identified CNG as a more affordable and sustainable energy alternative for Nigerians, especially during this energy transition period. He noted that CNG allows Nigerians to fuel their vehicles for about N10,000, offering a cost-effective alternative to petrol.
“The reason for reducing our stake in Dangote refinery is because we wanted to invest in CNG. We observed that CNG is very cheap and all over the world, people are investing in clean and cheaper alternative energy,” Soneye explained. “That is why the NNPC is building different CNG stations everywhere. We understand that with N10,000, Nigerians can fill their cars and use it for two weeks. We realized that gas is cheaper in Nigeria, why don’t we invest in it?”
On the allegations of sabotage, Soneye stated, “We want all Nigerians to know that the NNPCL does not have any issue with the Dangote Refinery. We are part of the owners of the Dangote refinery, and we don’t want it to collapse. We invested billions of naira into the Dangote refinery. As of today, we have a 7.2 percent stake in the refinery. So, why would we want to sabotage such a company?”
Soneye also clarified that the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s Chief Executive, Farouk Ahmed, acts as a regulator over all operators in the midstream and downstream sectors, including NNPC. “Mr. Farouk Ahmed is the head of Nigeria’s mainstream and downstream petroleum regulatory authorities. They have power over all refineries. Anything that has to do with the distribution of petrol, they are in charge. In fact, they are superior to the NNPC in that sector. We don’t have anything to do with them,” Soneye stated.
In 2021, NNPC acquired a 7.25 percent stake in the Dangote refinery for $1 billion, with an option to purchase the remaining 12.75 percent stake by June 2024. However, the national oil firm has since decided not to increase its stake. Alhaji Aliko Dangote, President of the Dangote Group, confirmed in July that NNPC owns only a 7.2 percent stake in the refinery, not the initially agreed 20 percent.
“The agreement was actually 20 percent which we had with NNPC, and they did not pay the balance of the money up until last year; then we gave them another extension up until June (2024), and they said that they would remain where they had already paid, which is 7.2 percent. So NNPC owns only 7.2 percent, not 20 percent,” Dangote stated.
Meanwhile, former Minister of Education Oby Ezekwesili has called for an independent audit to investigate why NNPC capped its investment in the Dangote refinery at 7.2 percent instead of 20 percent. “Did the Nigerian government not tell us it borrowed $3.3 billion from Afrieximbank to take a stake in the Dangote refinery?” Ezekwesili asked. She urged President Bola Tinubu to initiate an independent audit of the Dangote refinery-NNPC transaction to provide the public with a clear understanding of the situation.
Fitch Ratings, a credit rating agency, recently reported that the Dangote refinery plans to sell the remaining 12.7 percent NNPC stake this year for loan servicing.
