Nigeria’s challenges are complicated and multidimensional. So, President Bola Tinubu’s decision to take a three-week vacation should not have surprised anyone. The country’s problems can wear even the strongest people down.
But as the President takes his break, one issue deserves serious attention. It is the increasingly frosty relationship between Dangote Refinery and the Nigerian National Petroleum Company Limited.
The tension between these two powerful players has become a national concern. Nigerians ultimately feel the consequences through rising petrol prices and renewed questions about fuel imports.
A Complicated Relationship
The relationship has been complicated from the beginning.
NNPCL agreed to acquire a 20 per cent stake in Dangote Refinery during its construction. The ownership arrangement and eventual payment for the stake later became subjects of disagreement.
Those disagreements contributed to the difficult relationship between both sides.
The Federal Government’s decision to support the naira-for-crude arrangement was an important intervention. Selling crude to domestic refiners in naira was intended to improve access to crude.
It was also designed to reduce some of the foreign exchange pressures linked to petroleum production.
For a period, the arrangement appeared to offer some stability.
That stability now looks increasingly fragile.
The return of higher petrol prices and continued importation has revived concerns about whether Nigeria is fully using the refining capacity it has worked so hard to develop.
Nigeria Must Protect Its Refining Capacity
Dangote Refinery has fundamentally changed Nigeria’s petroleum landscape.
The refinery means Nigeria now has the capacity to process a significant volume of crude locally. The country no longer has to depend almost entirely on imported refined products.
That should be treated as a major national economic opportunity.
Nigeria has spent decades importing petroleum products despite being a major crude oil producer. The consequences have included pressure on foreign exchange and exposure to international market movements.
Businesses and households have also carried enormous costs.
The return of substantial fuel imports therefore deserves scrutiny.
Fuel marketers have legitimate commercial interests. Dangote Refinery also has a responsibility to operate profitably.
However, neither interest should take precedence over the broader national interest.
Competition Must Not Undermine Domestic Refining
The Federal Government must ensure that competition exists in the petroleum sector.
But competition should not become an excuse for policies that weaken domestic refining.
At the same time, Dangote Refinery must recognise its wider responsibilities.
Operating at such a scale comes with obligations beyond maximising profits. The refinery has received substantial government support and represents one of Nigeria’s biggest industrial investments.
Its pricing decisions can therefore have significant economic consequences.
The same principle applies to NNPCL.
If there are disagreements over crude supply, pricing or commercial arrangements, the government and relevant regulators should provide a credible way to resolve them.
These disputes should not be allowed to spill over into the lives of millions of Nigerians.
There is also no justification for allowing speculation about foreign refineries or political interests to distract from the central issue.
Nigeria needs a petroleum system that prioritises domestic value creation.
Every additional litre of petrol imported into the country can mean more foreign exchange leaving the economy. That money could otherwise support domestic production, jobs and investment.
This does not mean every import is inherently wrong.
Imports can play a legitimate role when domestic supply is insufficient or when competition requires them. But they should not become the default when Nigeria is developing the capacity to refine much of its own crude.
Government Must Resolve the Disputes
The government must resist every attempt to turn the petroleum sector into a battlefield between powerful interests.
Dangote Refinery, NNPCL, marketers and regulators all have legitimate roles.
But none should forget the people at the end of the chain.
Nigerians have already endured subsidy removal, inflation and high transportation costs. They have also faced repeated petrol price increases.
The country cannot afford another petroleum crisis created by corporate rivalry.
It also cannot afford regulatory failure or poor policy coordination.
The government must create an environment where domestic refiners can operate sustainably. At the same time, consumers must be protected from unnecessary price shocks.
Nigerians Must Come First
Dangote Refinery should consider the national interest when setting its prices.
NNPCL must also ensure that its decisions do not undermine domestic refining.
Both sides have commercial responsibilities. But they also operate within a sector that directly affects the lives of millions of Nigerians.
Nigeria has finally built the refining capacity it spent decades waiting for.
The priority now should be simple: make that capacity work for Nigeria.
