Dangote And The Shady Fuel Sector, By Kazeem Akintunde
Nigeria’s oil sector rumbled last week, when the Chairman of the Dangote Group of Companies, Alhaji Aliko Dangote alleged that the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, was spending millions of dollars on his children’s education in Switzerland, an amount far beyond his means as a public servant. Prior to that, he had accused the same Ahmed of economic sabotage for undermining domestic fuel refining efforts in Nigeria. Dangote insisted that the leadership of the NMDPRA under Ahmed was colluding with international traders and oil importers to frustrate local refining through the continued issuance of import licenses for petroleum products.
Like a man ready for war, Dangote provided the names of Ahmed’s children, the school they are attending in Switzerland, and the fees paid on each of them. Not done with just being a whistle-blower, Dangote followed up with a formal petition to the Independent Corrupt Practices and Other Related Offences Commission (ICPC). In the petition, Dangote, through his lawyer, Ogwu Onoja (SAN), called on the anti-corruption agency to arrest, investigate, and prosecute the NMDPRA boss for allegedly living far beyond his legitimate means as a public servant.
Ahmed, while responding to the allegations from the richest man in Africa, said that he has chosen not to engage in public brickbats with Dangote despite being aware of the allegations against him and his family. He expressed satisfaction that the businessman turned whistle-blower took the matter to the ICPC, adding that he would clear his name with the anti-graft agency.
However, the whole sordid drama reached a crescendo when Ahmed was summoned to the Aso Villa for a meeting with President Bola Tinubu but emerged from the meeting looking grim. Bayo Onanuga, media aide to the President, told a shocked nation that Farouk Ahmed had tendered his resignation letter to the President, a replacement appointed, and the name sent to the National Assembly for screening and confirmation.
Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), became another casualty of the petroleum industry war, as he was also sacked by Tinubu, who named Oritsemeyiwa Eyasan, former Executive Vice President, Upstream, of the Nigerian National Petroleum Company (NNPC) Limited as his replacement. Saidu Mohammed was nominated to take over from Ahmed as the CEO of the NMDPRA. Both of them have been confirmed by the Senate.
Farouk and Komolafe were appointed in 2021 by the late President Muhammadu Buhari to lead the twin regulatory agencies established under the Petroleum Industry Act (PIA).
Farouk Ahmed and Dangote have, in recent months, been locked in a public dispute over Nigeria’s downstream petroleum regulation and the future of domestic refining. While Farouk is of the view that Dangote refinery does not have the capacity to meet local demand for petroleum supply and that there would be healthy competition when other marketers are allowed to import fuel into the country, Dangote believes that continued fuel importation should be jettisoned, as his 650,000-capacity refinery could easily meet local demand. He is of the view that those who are importing fuel into the country should pool resources together to establish a refinery so that they can compete favorably with the Dangote refinery on the same template. Again, he also believes that the federal government can fix the nation’s four local refineries to make fuel available to Nigerians at a more reasonable price.
That Dangote has faced serious challenges since the onboarding of his $20 billion refinery would be an understatement. He has had to fight virtually everybody in the downstream sector of the petroleum industry. He has been quoted as saying that he would never have dabbled into the oil business if he knew that the mafia in the sector was that powerful, with tentacles everywhere. His war started with tanker drivers soon after the completion of the refinery. To ensure that his products get to all nooks and crannies of the country, Dangote had to work with petroleum tanker drivers -a group that has become law unto itself in Nigeria. Fearing that he may not get a favourable deal from them, Dangote decided to invest a tidy sum of N720 billion to acquire 4,000 compressed natural gas (CNG) powered trucks for direct distribution of fuel to retailers. There was immediate backlash from the Nigeria Union of Petroleum and Natural Gas Workers, (NUPENG), which went on strike, arguing that the scheme would displace thousands of its members and make them redundant. When the issue was eventually resolved with Dangote agreeing to employ some of the NUPENG’s members in the scheme, another trouble broke out about whether Dangote refinery would allow its staff to join the oil workers’ unions. NUPENG alleged that the refinery’s management and MRS, a fuel retail outlet owned by Dantata, Dangote’s cousin, had compelled drivers to sign undertakings not to join oil and gas unions.
The situation escalated into a strike on September 8, which effectively shut down depots and filling stations across the country. After government’s intervention, both sides signed an MoU prompting NUPENG to suspend the strike.
However, another round of war soon ensued between Dangote and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASAN) when about 800 senior staff of the Dangote refinery showed their willingness to join the union. They were summarily sacked in what Dangote described as a measure to protect the company’s facility and ensure its long-term stability.
Again, the PENGASSAN declared a nationwide strike which grounded operations at key oil and gas regulatory facilities, including the NNPC Limited, the NUPRC, and the NMDPRA. The strike triggered a drop in power generation, while queues returned to petrol stations in the Federal Capital Territory. PENGASSAN accused the refinery’s management of violating Nigerian labour laws and ILO conventions, alleging that dismissed staff were replaced with Indians. The strike was felt much in the homes of most Nigerians, as the price of cooking gas went haywire. The crisis was nipped in the bud after Tinubu directed the National Security Adviser, Nuhu Ribadu, and the Director General of the Department of State Services (DSS), Adeola Oluwatosin Ajayi, to intervene.
Dangote’s public spat with NMDPRA is not new, but this time, the industrialist has stepped a notch higher, accusing its chief executive of monumental corruption, which has eventually cost him his job. Dangote appears not only to be fighting the oil mafia; he is up against the President’s family. Wale Tinubu, President Tinubu’s cousin, is one of Nigeria’s major fuel importers. His company, Oando Plc, posted a 44% increase in revenue to N4.1 trillion and N220 billion profit after tax in 2024. Although Oando reported that its refined product volumes had declined by 64% to 599 KMT due to ‘’shifts in Nigeria’s domestic supply framework’’, the company may not be willing to abandon that line of business just yet. Oando is not the only fuel importer. Others are NIPCO, Bovas Oil, Eterna Oil, A.A Rano, NNPC Limited amongst a host of others.
These importers have already received import licenses covering about 7.5 billion litres of petrol for the first quarter of 2026, according to Dangote. The country consumes about 20 billion litres per year. Dangote does not find this funny. To beat the importers, Dangote has slashed his petrol prices to N740 per litre at the pump. This is to undermine marketers who have already placed order for imported fuel far above the price. In doing so, he is going to lose billions of naira while the marketers are also set to incur debts in the region of N75 billion.
The irony of our moment is noteworthy. For decades, we have been exporting crude oil while incurring substantial costs to import petrol and petrochemicals. This heavy dependence on imports has led to a host of economic and social issues, including the closure of numerous local industries, job losses, and a strain on the national currency and foreign reserves. While Nigeria debates whether to support its own industrial champion, the same America that has spent decades lecturing the developing world about free markets, now openly prioritizes domestic production, imposes tariffs to protect local industries, and makes no apology for these policies.
In Nigeria, we also need to get our priorities right. Do we want to create jobs for our teeming youth population or are we content to remain a consumption economy? Should we protect and nurture local investors or conspire to run them out of business?
Whether Farouk Ahmed jumped or he was pushed is irrelevant. The fact remains that he is now out, but there must still be an investigation to clear the air and restore confidence in our institutions. And I am talking about regulatory oversight and not the charge of scandalous school fees for some privileged children, which anti-corruption agencies can easily handle. This should not be swept under any carpet. However, if there is merit to Dangote’s claims of sabotage, vested interests, or regulatory capture, Nigerians deserve to know, too. The Chinese did not build their industrial might by undermining their own manufacturers. The Americans didn’t become an economic superpower by frustrating domestic production.
Every serious nation makes a choice: build your productive capacity or remain forever dependent. Even if there are differences between Dangote and the petroleum industry regulators, efforts should be made to resolve them. No responsible government should work for the failure of a $20 billion project that adds considerable value to the economy in countless ways. If the fear is that Dangote could become a monopoly in the downstream oil sector, those currently importing fuel should team up and set up another refinery here. This would lead to job creation and also save the nation much needed foreign exchange.
While I am not a fan of Dangote and his business style, no right-thinking government or any of its agencies should do anything that could cripple the project. The downstream sector of the oil industry is so strategic to the country’s growth and development. It should not be toyed with or left in the hands of an individual. Now is the time for the federal government to dismantle the mafia in that sector and allow Nigerians to breath.
It is shameful enough that we have four refineries that could not refine a single drop of petrol in spite of the huge investments on yearly turn-around maintenance. A private refinery has come on stream and everything should be done to protect it in the interest of Nigerians.
See you next week.
