Alhaji Aliko Dangote, Africa’s richest man and President of the Dangote Group, has made it clear that he is not interested in investing further in Nigeria’s petroleum sector, which he referred to as a “mafia business.”
Despite recently unveiling plans to build Nigeria’s largest seaport as part of expanding his business empire, Dangote revealed during a visit to the Dangote Petroleum Refinery by members of Global CEO Africa that the oil sector is one he’s hesitant to step into.
This statement stands in contrast to the fact that his refinery is already deeply tied to the petroleum sector he criticized.
According to Dangote, Nigeria’s daily fuel consumption is greatly exaggerated, and he attributed this to widespread corruption within the industry.
He claimed that Nigeria does not consume up to 40 million liters of fuel each day, despite what official numbers suggest, and explained that the level of corruption is the main reason he has chosen to stay away from deeper investments in the sector.
He said that during the gasoline subsidy era, many individuals deliberately inflated fuel consumption figures in order to drain state funds.
As reported by The Punch, in the Q4 of 2024, the Nigerian Midstream Petroleum Regulatory Authority (NMDPRA) claimed that the Yuletide season led to daily demand for petrol reaching 50 million liters.
According to Farouk Ahmed, the CEO of the NMDPRA, the country’s daily gasoline consumption at the time ranged between 45 and 50 million liters.
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The NMDPRA said that the numbers had dropped from 66 million liters per day in 2023 to 50 million liters per day following President Bola Tinubu’s removal of the fuel subsidy.
“Following Mr President’s withdrawal of subsidy, the announcement on May 29, 2023, we immediately saw a steep decline in consumption, and between then and as we speak, we’ve continued to do plus or minus 50 million litres. That’s a considerable reduction in volumes,” the Executive Director, Distribution Systems, Storage and Retailing Infrastructure at NMDPRA, Ogbugo Ukoha, said in February.
Nonetheless, Dangote completely rejected the NMDPRA’s findings, insisting they do not reflect Nigeria’s actual fuel use.
The billionaire said the country’s daily fuel consumption is around 33 million liters, a figure that is 17 million liters lower than the NMDPRA’s estimates.
He said the figures had been inflated when fuel was subsidised, at one point being reported as high as 90 million liters, and argued that the country does not even have enough cars on the roads to justify those numbers.
“The fuel requirement of Nigeria, which we believe, based on our own estimation, is a consumption of 33 million litres per day. But, you know, because it was a subsidised item, they bloated the numbers, at one point, even to 90 million litres. But we don’t have that number of vehicles. So, real consumption is about 33 million litres of petrol,” Dangote stated.
He went on to reveal that Nigeria’s aviation sector uses only 3 million liters of fuel daily because there are not many flights.
“So in all, we believe 46 million litres (of petrol, diesel and jet fuel) would satisfy these three products’ needs while we are going to produce 104 million litres every day,” he said.
He also disputed another number from regulators, saying that as opposed to the 14 million liters of fuel reported by them, only 10 million liters were actually consumed.
Dangote stated that the refinery will produce 34 million tons of petroleum products annually, with 58 million liters of that amount earmarked for export.
In response to questions from the 26 CEOs from six African countries who visited the refinery, Dangote made his stance clear.
Despite his major investment in refining, he is not interested in getting directly involved in the oil business itself. “Oil is a mafia business that I did not want to get involved in,” he said.
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Image Credit: Vanguard
