A geologist and former member of the House of Representatives, Honourable Godfrey Ali Gaiya, has given reasons why business mogul Alhaji Aliko Dangote will continue to have an impact on Nigeria’s oil and gas sector unless the government takes the right steps.

Gaiya said that as a businessman, Dangote will continue to make decisions that protect his business interests and not those that would make him run at a loss.

He noted that the invasion of Iran on February 28 by United States and Israeli forces has pushed crude oil above $100 per barrel in the international market, from between $70 and $80 per barrel before the war.

The escalation of the war has seen the global oil market affected by the closure of the Strait of Hormuz, where more than 80% of tankers and oil cargoes pass through, with Nigeria not left out, as citizens continue to face economic hardship at home.

In view of the development, Dangote, through its Lagos-based 650,000-barrel-per-day refinery, has become a major determinant of fuel prices in Nigeria.

The petrol price has now increased to N1,300 from N800 some eight weeks ago. His case was also strengthened by the fact that the four government-owned refineries are not operational.

The former lawmaker, who is also a public affairs analyst, said the world has become a global village such that whatever happens anywhere at any time will have effects on the global economy, including Nigeria.

He said, “The world has become a global village, such that whatever happens anywhere would have a ripple effect somehow. What is happening in the Gulf definitely must have a ripple effect in Nigeria, particularly when the Gulf happens to be the 90 per cent owner of the crude.

“And therefore, if anything happens in the Gulf where accessibility to crude is being hampered, it will affect everywhere, including Nigeria.

“Before the Gulf War, crude was about $60 to $70 per barrel. Now we are looking at $120-plus per barrel. A refiner can only sell and hope to make a profit.

“So if a refiner was buying before at $70 per barrel and today the same refiner is buying crude at $130, there is no way he can sell at the price he used to. Also, don’t forget that the war has affected production in the Gulf as well. The Strait of Hormuz is where about 90 per cent of oil goes through to the world.

“Dangote is a player in that environment, and there is little he can do to force down the price of crude. He must buy at that amount and refine before selling. So it is not just Dangote; it is the factors I have mentioned.”

He added, “But if the other refineries are also operational, then they can give him some competition for his investment. But if crude is going up and there is no other player, he must produce, and he must buy.

“The four refineries, which are government-owned, should have been working at this time. If there is no subsidy in the refining sector, then the government should ensure that its own refineries work to enable the average Nigerian to have a reason to choose between those four government refineries and the Dangote Refinery.”

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