PENGASSAN Urges FG to Raise Stake in Dangote Refinery to 45% for Energy Security

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has urged the Federal Government, through the Nigerian National Petroleum Company (NNPC) Limited, to increase its stake in the Dangote Refinery to 45% in order to enhance the nation’s energy security.

Festus Osifo, the President of PENGASSAN, made this statement on Tuesday during the “World Press Conference for the presentation of its communique and recommendations from the 3rd edition of the PENGASSAN Energy and Labour Summit” held in Lagos.

Osifo advocated for an increase in the government’s current 7% shareholding in the Dangote Refinery to at least 45%. He argued that this would provide greater energy assurance and security for Nigeria’s population.

He explained that under the present circumstances, Dangote could export his refined products globally if domestic prices are unfavourable.Referring to Dangote’s fertiliser production, Osifo highlighted that the majority of the products are exported.

He warned that without a significant government stake in the refinery, Dangote could send all products abroad. However, with a 45% stake, the government could ensure a portion remains in Nigeria while Dangote exports the rest.

Osifo also pointed out that although increasing the government’s shareholding to 45% would bolster energy security, it would not grant the government decision-making power in the refinery. For that, a majority stake of over 50% would be required.

He noted that Dangote operates in a free trade zone, meaning his operations are not subject to most Nigerian laws. This allows him flexibility in importing crude and exporting refined products.

The Nigerian National Petroleum Corporation (NNPC) initially held a 20% share in the Dangote Refinery. However, in July, Aliko Dangote, the CEO of Dangote Refinery, revealed that this stake had dropped to 7.2%.

Dangote explained that this reduction occurred because the state-owned oil company had failed to pay the full amount for its share, which was due in June.

In a separate interview with Bloomberg TV on Monday, Dangote disclosed that the Dangote Group had offered NNPC an attractive deal worth around $2.79 billion, but the company was unable to meet its financial obligations.

He elaborated that the agreement involved an initial payment of $1 billion, which NNPC had made around 18 months ago. However, NNPC opted to retain a 7% stake, leaving Dangote with the remaining shares.

He remarked that he believed NNPC had made a significant error.When asked about the possibility of reopening negotiations with NNPC, Dangote stated that the deal was final and would not be revisited.

“There are no further negotiations with us. The agreement is done, and that’s where we stand,” Dangote concluded.