Following the commencement of gasoline production by the $20 billion Dangote Refinery located in Lagos, on Tuesday, the chief executive officer of the giant oil plant, Aliko Dangote has announced there will be tracking of all products from the refinery to ascertain the exact volume Nigerians consume.

This marks a new chapter for Nigeria, a country long plagued by discrepancies in its fuel consumption figures, which have been a source of controversy and suspicion.

During a press briefing held at the expansive petrochemical plant in Lagos, Dangote declared that with the refinery now operational, Nigeria is better equipped to accurately monitor and report its daily petrol consumption.

He emphasized that the refinery’s capabilities would put an end to the pervasive issues of round-tripping and the falsification of import documentation, problems that have severely undermined the credibility of Nigeria’s reported fuel consumption statistics.

Tackling Round-Tripping and Documentation Fraud

Round-tripping, a fraudulent practice where fuel is documented as imported into Nigeria but is instead diverted elsewhere, has been a significant issue within the petroleum sector. According to Dangote, the refinery’s operations will bring much-needed transparency to the process.

“As you know, there is quite a lot of what you call round-tripping whereby people now do documentation and the fuel is not coming to Nigeria. And this is a fact,” Dangote stated.

He went on to explain that with the refinery now functioning, it would “show the true consumption of Nigeria,” providing the ability to “track every single loaded truck” and “loaded ship,” thus offering unprecedented visibility into the country’s fuel logistics.

This move by the Dangote Refinery is poised to close the chapter on the long-standing discrepancies that have clouded Nigeria’s fuel consumption data, bringing a new level of accountability to the industry.

The Impact on Foreign Exchange and Economic Stability

Beyond addressing fuel consumption discrepancies, Dangote also highlighted a significant policy initiative by the Federal Executive Council (FEC) that will see crude oil supplied to the refinery in local currency. This policy, known as the “Naira for Crude” arrangement, is expected to slash Nigeria’s demand for foreign exchange by at least 40%. The reduction in demand for U.S. dollars is expected to bring greater stability to the naira, Nigeria’s local currency, which has faced significant devaluation pressures in recent years.

“I want to personally also thank Mr. President for creating this idea of Naira for Crude and also Naira for the product. This will give a lot of stability for the Naira because you remove 40% of the demand of the dollars in the market,” Dangote said, expressing gratitude to President Bola Tinubu and his administration for the strategic move.

This policy is particularly critical in light of the economic challenges that have followed the removal of the fuel subsidy. Announced by President Tinubu during his inaugural address in May 2023, the end of the petrol subsidy led to a more than 400% increase in petrol prices, driving inflation and placing additional strain on the economy. The Naira for Crude arrangement is seen as a measure to cushion the impact of these economic shocks by reducing the country’s reliance on foreign currency.

Unraveling Nigeria’s Fuel Consumption Figures

The inconsistency in Nigeria’s petrol consumption figures has been a long-standing issue. For years, different government agencies have provided conflicting data, leading to confusion and mistrust among the public. For example, the Nigeria Extractive Industries Transparency Initiative (NEITI) reported that in 2019, Nigeria imported 20.6 billion liters of petrol, suggesting a daily consumption rate of 55 million liters. In contrast, the Nigerian National Petroleum Corporation (NNPC), the country’s main petroleum regulatory body, has offered varying figures.

In 2022, NNPC’s Group Chief Executive Officer, Mele Kyari, stated that daily consumption was at 68 million liters, while another NNPC report placed the figure as high as 74 million liters for certain periods in 2022.

These discrepancies have sparked widespread skepticism, with accusations that the figures were being manipulated. The House of Representatives Committee on Finance, for instance, accused the now-defunct Petroleum Products Pricing Regulatory Agency (PPPRA) of falsifying data, noting discrepancies between figures provided by different agencies, including the NNPC and the Nigerian Customs Service.

The situation was further complicated by reports of large-scale smuggling of petrol to neighboring countries, which some estimates suggest could be as high as 15.6 million liters per day. This figure has been doubted also, as the logistics required to smuggle such a large volume of fuel daily are daunting.

A Path Toward Transparency

The discrepancies and challenges in tracking Nigeria’s petrol consumption have been attributed to corruption and incompetence within key government agencies. Professor Pat Utomi, a renowned political economist, argued in an interview with The Punch that modern technology should make it possible for all relevant agencies to have accurate and up-to-date data on fuel consumption.

“In this time and age of cutting technology, how can agencies responsible for such information claim they do not know the actual volume of products consumed? Modern technologies have made it possible for all agencies to know and have access to such figures at the same time every day if they want to. The only problem that can be responsible for such discrepancies is corruption and incompetence,” he said.

The commencement of gasoline production at the Dangote Refinery is believed to have come with a promising solution to these long-standing issues. The refinery’s advanced tracking systems are expected to provide real-time data on fuel consumption, helping to eliminate the discrepancies that have plagued the sector. By accurately monitoring every truck and shipment, the refinery aims to establish a clear and reliable picture of Nigeria’s actual fuel usage.

Tekedians, as you celebrate your graduation, across cities this weekend, I want to wish everyone a great trip, and safe journeys. These learners-independently organized programs are a critical part of our heritage. In our pursuit to discover and make scholars noble, bright and useful, we have also come to LEARN from all. I am seeing some nice designs, from mufflers to t-shirts to etc, and they are amazing.

You have already made this an academic festival by looking at the faculty members coming to speak. I thank our Faculty members for making time to educate the #future.

Our product is KNOWLEDGE and knowledge rules the world. Congratulations and thanks for choosing Tekedia Institute. Celebrate Knowledge and advance your personal economy and the wealth of your communities. #ready2lead

May I also take this moment to commend our Program Manager, Eyitayo Adeleke. He is the human operating system for managing things.

Ndubuisi Ekekwe

Lead Faculty

Nvidia lost a national GDP yesterday: “the biggest one-day loss in market cap, down $280 billion yesterday as its shares sank 9.5%”. What happened? The US Department of Justice (DOJ) sent a subpoena to investigate whether Nvidia violated antitrust laws by making it harder for buyers of its product to switch or shop around.

In the 19th century, railroads played a pivotal role in shaping the American economy, with intense competition and financial struggles characterizing the industry. However, this era also saw the rise of monopolies like Standard Oil, which revolutionized the oil industry through efficient production and transportation methods. The Panic of 1873 further exacerbated economic challenges, leading to significant repercussions for both businesses and consumers. In response to concerns about monopolistic practices, the Sherman Antitrust Act was introduced in 1890 to regulate anti-competitive behavior and promote fair competition. Fast forward to today where tech utilities dominate.

For Rockefeller’s Standard Oil, the real antitrust issue was not about crude oil. Standard Oil won via innovation in the oil industry, and became the category-king. What caused the problem was that it wanted to use railroads distribution pricing competitiveness, via bulk discounts, to keep its position. Those discounts provided asymmetric unfair positioning which other oil producers could not match. The government stepped in and helped, breaking the oil giant into pieces.

I made the same point when I argued that it was illegal what Google Search did with Apple; I wrote “ Google won search via innovation and has the rights to capture all the associated goodies on innovation. But Google should not and must not use contracts to keep its dominance on search. In other words, paying Apple about $20 billion to have Google as its default in its browser is not fair and balanced, not just for the competitors, but also for users.”

For NVIDIA, the challenge may not be the chips, but CUDA (Compute Unified Device Architecture) – the parallel computing platform and programming model from NVIDIA that allows developers to use GPUs for general-purpose processing –  which makes everything work. The CUDA and other auxiliary ecosystems may be the railroads to the AI business which is the crude oil business of the 21st century.

Yet, we do not expect the government to use the same medicine it used on Standard Oil on Nvidia. NVIDIA must be compelled to open its “software” just as Microsoft was compelled to open “Windows”, making it possible to breed new generation companies in the internet age.

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Nvidia lost a national GDP yesterday: “the biggest one-day loss in market cap, down $280 billion yesterday as its shares sank 9.5%”. What happened? The US Department of Justice sent a subpoena to investigate whether Nvidia violated antitrust laws by making it harder for buyers… pic.twitter.com/7TCRWkmCkP

— Ndubuisi Ekekwe (@ndekekwe) September 4, 2024

Comment 1: I am against antitrust laws cos it breeds government unnecessary interventions. I feel everyone should be innovative cos it will breed more competitiveness. All this government intervention are unnecessary and useless.

My Response: Without those laws, you may not even make this comment if using a PC. Microsoft would have blocked the installation of any service it did not invent on Windows. It would have made the browser work only on its services.

Your local telephone company would have blocked you from checking the prices of an alternative. Possibly, you may have to pay to comment, even as others are allowed to post free. Your local gas company can charge 10x because it is the only one with gas.

As they say, the world will be terrible if we get all our wishes: do not wish for a world without antitrust. If that happens, Google will have 1,000 subsidiaries and Google Search will be there to send you to them. 

Comment 2: If Google is paying for only it’s search engine to be used on Apple browsers that will be a monopoly and hence contravening the antivirus law.

But in this case any search engine can be set as the default in Apple. What Google pays for it’s for it’s search engine to be automatically set as the default which a user can change if desired.

My Response: Google can decide to start 1,000 companies and prefer those companies when you search for anything online irrespective of their quality levels. That does not mean you cannot visit those alternative companies yourself. So, from airline tickets to restaurants, etc, Google will run them. That Google has set its companies as defaults does not mean you cannot change the results to those alternatives. I am not sure you would like that outcome. Now, consider that scenario with your second paragraph.