Subsidy

By Haroon Aremu

Dangote Refinery and the Nigerian National Petroleum Corporation (NNPC), two titans in Nigeria’s oil sector, have become unwitting pawns in a high-stakes game of greed, corruption, and control that threatens forever to alter the landscape of the country’s economy. 

The fallout from this secretive manipulation could send shockwaves across Nigeria and the global oil market. But the question remains: how deep does the corruption run, and who pulls the strings?

As Nigerians struggle with fuel scarcity and skyrocketing prices, a disturbing reality emerges—those tasked with managing the nation’s resources deliberately keep refineries inoperative, creating bottlenecks to enrich themselves. At the heart of this heist lies an even more sinister story: a calculated move by a select few to dominate and monopolise Nigeria’s oil industry by manipulating state-owned enterprises and private ventures like Dangote’s Refinery.

Is the NNPC’s Shady $2.76 Billion Stake in Dangote Refinery a marriage of convenience?

In 2021, when the NNPC acquired a 20% stake in Dangote Refinery for a staggering $2.76 billion, many believed it was a monumental step towards bolstering Nigeria’s refining capacity. But beneath the surface, critics questioned the logic of the government investing public funds into a private venture while neglecting its decrepit refineries, which had been left to rot due to years of corruption and mismanagement. 

Was this a genuine attempt to revive the oil sector or a well-disguised ploy to channel public funds into private pockets? The decision becomes even more dubious when you consider that NNPC’s refineries have been operating at less than 20% capacity for years despite repeated promises of rehabilitation. 

These non-functioning facilities force the nation to import most of its fuel, which conveniently benefits the very cabals that control the import contracts. As these refineries remain dormant, Dangote’s refinery, with its projected 650,000 barrels per day capacity, is positioned to monopolise the market once it becomes fully operational. 

Was the NNPC’s investment a masterstroke of collusion to further empower this monopoly? I wonder if Dangote’s unholy alliance with the government is a favouritism or Strategic Investment.

Aliko Dangote’s influence in Nigeria’s political sphere is well-known. His ability to secure favourable policies has long raised eyebrows. Many believe his success is due as much to his business acumen as his close ties with top government officials. Recent import restrictions, for instance, have practically handed the domestic market to Dangote.

Dangote Refinery’s development, delayed since its original 2016 completion date, has ballooned in cost from $9 billion to over $19 billion. Was this financial mismanagement, or were there deeper, darker forces at play—possibly designed to funnel excess funds into the hands of corrupt officials?

As the cabal’s grip tightens, their influence on oil prices becomes increasingly evident. Dangote’s market dominance will give him unprecedented pricing power. But with such control comes the risk of manipulation. 

The refinery’s vast production capacity could easily be used as leverage to influence oil prices, both domestically and internationally. Many fear prices will be artificially inflated, maximising Dangote’s profits while further squeezing Nigerian consumers.

This scenario becomes even more plausible given the NNPC’s deep involvement in the refinery. With its 20% equity stake, NNPC’s role in pricing decisions cannot be overlooked. Will this be another case of public officials prioritising their private interests at the expense of national development?

As domestic pressures mount and whispers of foreign market dominance grow louder, one question looms: will Dangote begin prioritising foreign buyers over Nigeria’s fuel needs? 

With access to international markets offering better returns and more stable pricing, there is growing concern that the refinery may abandon the local market in favour of more lucrative exports. This could leave the country in an ironic situation, producing refined oil but still unable to meet domestic fuel needs, leading to ongoing scarcity and high prices despite local production.

If the cabals continue manipulating the domestic oil market, forcing prices to unsustainable levels, Dangote might have little choice but to look beyond Nigeria’s borders. 

The timing of the refinery’s commencement raises even more questions. As Nigeria grapples with the controversial removal of its long-standing fuel subsidy, many speculate that this policy shift is designed to align with the Dangote Refinery’s launch. With subsidies removed, domestic fuel prices are expected to skyrocket, conveniently paving the way for Dangote to step in as the dominant player, reaping the rewards of higher prices.

While the government frames subsidy removal as a necessary economic reform, many Nigerians view it as another instance of policies being shaped to benefit the few at the expense of the many. The alignment of these policies with the refinery’s launch timeline is too coincidental to be ignored.

The potential for Dangote’s monopoly to distort the Nigerian oil market. With NNPC’s refineries effectively sidelined and the cabals controlling much of the nation’s oil wealth, Dangote stands poised to dominate every facet of the industry—from refining to distribution. However, monopolies rarely benefit consumers, particularly in essential industries like oil.

As Nigeria’s oil sector hangs in the balance, powerful forces are clearly at play. The cabals’ influence, Dangote’s political connections, and NNPC’s complicity have all converged to create a complex web of corruption, exploitation, and control. 

Will Nigeria’s oil wealth finally be harnessed for the benefit of its people, or will the cabals and monopolies continue to enrich themselves at the expense of the masses? 

One thing remains certain: the truth behind the Dangote Refinery’s rise and NNPC’s role in it could be the bombshell that blows the lid off one of Nigeria’s biggest corruption scandals yet.

Haroon Aremu is a passionate writer and Mass Communication graduate, currently serving as an NYSC member. With a focus on national development, he is keen on leveraging his expertise to drive positive change and welcomes opportunities in public policy, media, and development sectors. He wrote in via exponentumera@gmail.com.

By Hauwa’u Abubakar

Overtime, Nigerians have experienced hike in basically all goods and services required to live and run their day to day activities. This goes without saying has been aggravated by proclamation of subsidy removal on premium motor spirit (PMS) popularly known as petrol, some three months ago.

It becomes imperative to understand the factors responsible for high cost of living as it leads to higher expenditure for individuals and households. Some of the factors leading to this unwanted development include inflation or an increase in the general level of prices.

Nigeria has experienced persistent inflation over the years, with prices of goods and services continuously rising. This reduces the purchasing power of individuals, making it more challenging to afford basic necessities. Also, depreciation of the country’s currency.

The naira, has faced fluctuations and depreciation in value against major foreign currencies like the US dollar. This has led to higher import costs, making imported goods more expensive for consumer. Furthermore, dependence on imports for various products, including food, fuel, clothings, building materials and other consumer goods, has the tendency to result in higher prices due to transportation cost, tariffs, and exchange rate fluctuations.

Again, infrastructural challenges is another force to reckon with. Inadequate infrastructure, such as power shortages and poor transportation networks can increase the cost of goods and services. Businesses often have to bear the burden of additional expenses since they are not provided by the authority and they eventually pass these expenses to consumers so as to make profit and keep their trade afloat.

Income quality as a factor. Nigeria has a significant income disparity, with a large portion of the population living in what is termed multidimensional poverty due to the disparity. This poverty limits access to basic resources like education, healthcare, and housing, further exacerbating the cost of living for many individuals. Government policies such as removal or reduction of subsidies, can lead to price hikes for essential commodities also.

To address this worrisome situation, it is firstly important for citizens to understand that the high cost of living in Nigeria is a complex issue influenced by various factors such as those aforementioned. Efforts to address this challenge should involve measure to tackle inflation, improve infrastructure, diversifying the economy, and promoting policies that support income equality and affordability for citizens.

Strategies to employ in improving infrastructure are; investing in infrastructural development, such as transportation power, road network, water supply among other can help reduce cost associated with transportation and other expenses passed down to consumers.

Enhancing agricultural productivity. Promoting and supporting the agricultural sector can reduce food prices and enhance food security. Improving farming techniques, access to quality irrigation systems are all strategies through which dependency can be reduced on imported goods.

Encouraging competition could be a tactics. Promoting competition in key sector such as telecommunications, banking, and energy to prevent monopolies and encourage market efficiency can help lower price for consumers.Control of inflation, implementation of effective monetary policies and fiscal measures to control inflation, increased wages and ensuring that wages and salaries keep pace with inflation can help improve people’s purchasing power and reduce the burden of high costs.

Developing effective social welfare programmes can provide a safety net for vulnerable populations, reducing the impact of high cost of living on those with limited financial resources.

In conclusion these are just comprehensive approach that addresses multiple aspect of the economy and society and if adopted by the government and relevant agencies, Nigerians can be saved from the bondage of high cost of living, the time this now!.

Hauwa’u is a 200-Level Student of Ahmadu Bello University, Zaria, Kaduna State and can be reached via: hauwaat@yahoo.com

By Muhammadu Sabiu

To lessen the impact of eliminating the petrol subsidy, the federal government has promised a N5 billion palliative for each of the federation’s states, including the Federal Capital Territory. 

Babagana Zulum, the governor of Borno State, made the announcement to reporters at the State House on Thursday after the National Economic Council meeting in Abuja. The meeting was presided over by Vice President Kashim Shettima. 

The governors of the 36 states, the governor of the Central Bank of Nigeria, and other government officials who have been coopted make up the council.