Thread by @realkelvin07

LONG THREAD: First thing we need to understand is that Dangote Refineries is classified as critical national infrastructure (CNI): ‘‘These are institutions, bodies or structures that provide essential goods and services forming the backbone of an economy.’’

Each barrel of crude has 159 litres that produces 170 litres worth of derivatives after the hydrocarbons are heated and seperated through different processes. Here are the derivatives of crude:

43%: Gasoline (73 litres)
23%: Automotive Gasoline Oil or Diesel (40 litres)

9%: Jet A1 (15.5litres)
5%: Coke or Pepcoke (8.5litres)
4%: Heavy fuel Oil (6.8litres)
4%: Still gas (6.8litres)
3%: Liquefied Refinery Gas (5.1litres)
3%: Asphalt (5.1litres)
2%: Petrochemical feedstock (4.2litres)
2%: Lubricants (3.4litres)
1%: Kerosene (1.7litres)

According to the Department of Petroleum Resources, Nigerians consume 38.2m litres of fuel daily. I ran the numbers at 230 per litre landing cost for the independent petroleum marketers association of Nigeria, IPMAN spends approximately 8.7bn naira daily or 3.1trillion naira p.a.

Now the NNPC has to step in to subsidize the landing cost by paying the marketers 75 naira per litre of petrol imported. This brings the bill to 2.8bn per day or 1trillion per year for making sure that you get petrol at 165 per litre.

Nigerians consume 12m litres of diesel daily

and 23.3m litres of Kerosene daily. The government has to apply the same model to subsidize to IPMAN for AGO and Kerosene

The reason I took time to mention all the derivatives of crude oil above is because we export the crude and bring back only PMS, AGO & Kero

All the other derivatives that constitutes 23% of the derivatives are lost to the refineries abroad through smart companies given the Oil swap deal to take out crude oil and import these major components we use daily.

E.g In 2020, Nigerian construction companies spent 310bn

Importing Asphalt to use as bitumen binders for roads. The World Bank estimates that the 135 thousand km of roads Nigeria needs requires between $89-112bn worth of asphalt to construct.

& Dangote Refineries is going to be producing 3.3m litres of bitumen daily per 650k barrels

Dangote Refineries is going to be producing 47.4m litres of fuel per day given the 43% of 170 litres that a barrel of crude oil gives as derivative. This means Nigerians are consuming 88% of the fuel he refines daily, that doesn’t need

Shipping, Cost, Insurance & Freight, impairment premiums from the risk of handling, port charges and clearing costs. Let me talk about Petrochemical feedstock that produces Urea and Polypropylene and Polyethylene crystals, that are raw materials for fertilizer and packaging bags

Before he started, Notore Chemicals was the only major in this field. Bagco (a subsidiary of flour Mills) says the Monopoly of Notore is responsible for the exhorbitant prices of crystals for bag making, that in turn affects cost to income ratio of FMCGs.

There are other derivatives like Still gas, Heavy fuel Oil (IFO 180 and 380 used for big boats and ships), there's Pepcoke used for making steel and aluminium, of which Nigerians imported #887bn worth of in 2020.

Dangote is going to save Nigeria at least $10bn worth of imports

On annual basis from companies backwardly integrating from him. He’s also going to earn another $5bn worth of FX dollars exporting to other countries of which he’s already started for petrochemicals.

The CBN and NNPC has all these data before them,

And this is why it decided that for a company that can bring in that much revenue and produce more petroleum derivatives than we are importing daily, to avoid Monopoly, it’s best we take a stake and secure a board seat.

That way it can make decisions on where the FX dollars

Are sent to. If you leave it to Alhaji, he will allow Carlyle that’s currently setting up his family office to move it to New York. But the FX he earns per annum can solve the $110m per week of allocation the CBN was giving to the BDC’s.

Good evening.