By Ayomide Otitoju
The Nigerian National Petroleum Company Limited (NNPCL) has strategically reduced its stake in the Dangote Refinery from 20% to 7.2%, opting to divert funds toward the development of Compressed Natural Gas (CNG) infrastructure across the country. This was disclosed by NNPCL spokesperson Olufemi Soneye during an appearance on Berekete Family Radio, a video of which was obtained by our correspondent on Monday.
Soneye explained that the decision to cap NNPCL’s stake at 7.2% was driven by the company’s commitment to promoting CNG as a more affordable and environmentally friendly energy alternative for Nigerians, particularly during the ongoing energy transition.
“The reason for reducing our stake in the Dangote Refinery is to invest in CNG,” Soneye stated. “We observed that CNG is very cheap, and globally, there is a shift towards clean and cheaper alternative energy. That’s why NNPCL is building CNG stations nationwide. We understand that with N10,000, Nigerians can fill their cars and use them for two weeks. We realized that gas is cheaper in Nigeria, so why not invest in it?”
Addressing allegations that NNPCL was collaborating with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to undermine the Dangote Refinery, Soneye dismissed such claims as unfounded, emphasizing that NNPCL’s investment in the refinery precludes any intent to sabotage it.
“We want all Nigerians to know that NNPCL has no issues with the Dangote Refinery,” Soneye asserted. “We are part owners with a 7.2% stake and have invested billions of naira in the project. Sabotaging a company in which we have such a significant investment makes no sense.”
Soneye further clarified the role of NMDPRA’s Chief Executive, Farouk Ahmed, noting that Ahmed’s authority as a regulator covers all midstream and downstream operations in the petroleum sector, including NNPCL. “Mr. Farouk Ahmed oversees all refineries and anything related to the distribution of petrol. In that sector, they are superior to NNPCL. We do not have any control over them,” he added.
In 2021, NNPCL initially acquired a 7.25% stake in the Dangote Refinery for $1 billion, with an option to purchase the remaining 12.75% by June 2024. However, the company later decided against increasing its stake, a move confirmed by Alhaji Aliko Dangote, President of the Dangote Group, in July. Dangote clarified that while the original agreement was for a 20% stake, NNPCL chose to remain at 7.2% after failing to meet payment deadlines.
Former Minister of Education Oby Ezekwesili has called for an independent audit to investigate NNPCL’s decision to cap its investment in the refinery at 7.2% instead of the initially planned 20%. “Did the Nigerian government not tell us it borrowed $3.3 billion from Afreximbank to take a stake in the Dangote Refinery?” Ezekwesili questioned, urging President Bola Tinubu to initiate a comprehensive audit to clarify the details of the NNPCL-Dangote Refinery transaction.
Recent reports from Fitch Ratings indicate that the Dangote Refinery is considering selling the remaining 12.7% stake intended for NNPCL this year to service loans.
