“If a man takes no thought to what is distant, he will soon find sorrow near at hand” – Confucius, 551-497 BC, Vanguard Book of Quotations
Get ready for bad news about Nigeria’s refineries – Dangote’s, FG’s or modular.
“Wanted: Competition for Dangote Refinery” – Punch Editorial, October 2024.
The paper went on to state that “The answer lies in not allowing the Dangote Refinery become a monopoly. It needs competition.” The editorial was both right and wrong. Right, because it portrays the conventional wisdom about the place of refineries in Nigeria today.
Wrong, because Nigerians are demonstrating to the world again that we remain slow-learners. A few days before the editorial, a newspaper had published a statement by the chairman of the refinery, Alhaji Aliko Dangote, claiming that he could have bought Arsenal Football Club for $2 billion; but, he chose his Refinery. I shook my head in disbelief.
Africa’s richest man had Arsenal within his grasp; and he went for a refinery? Incredible!!!
Before going into the substance of this article, there is a need to address the point raised by the Punch editorial about denying Dangote a monopoly. We should, under ordinary situations, have competition. I also once thought that way.
Today, that position amounts to spreading the tragedy which will inevitably soon befall refineries among several Nigerian investors. Refineries are heading for the grave yard of history – like the ink and pen of the last century. Children born ten years from now will never know about refineries as sources of fuel. Refineries, living dinosaurs, will soon become extinct. Africa will be the last continent to have cars running on petrol and diesel; because the rest of the world is moving rapidly away from petrol and diesel engines. What does it matter if Dangote has a monopoly or not?
As far as I am concerned, the man should have bought Arsenal for $2 billion instead of gambling $19 billion on the refinery. Arsenal might still be around in 2124 – that is 100 years from now. It is doubtful if any refinery producing petrol and diesel will still be operating fully ten years from now. In short, the entire argument about Dangote monopoly is pointless. I don’t envy the fellow. Like the guest who arrives late to a party, all he will have to eat and drink are leftovers.
Refineries now a dying sector
“Transport is going through a transformational period which will define a new era in vehicle engineering and design…(and) critical is the search for the best replacement for petrol [and diesel]”. – Article in Google, October 5, 2024.
For more than four months, I have been following reports from various advanced countries about the international race to reach the new Holy Grail of energy.
One thing is certain, the most developed nations, which are also the leading engine manufacturers, have passed a death sentence on petrol, diesel and aviation fuel. Collectively and individually, they have rendered refineries, including Nigeria’s new ones obsolete – long before they reach maturity.
Below are a few of the initiatives designed to assassinate fossil fuel refineries. From the list of initiatives, apparently everything including the birth water is now a potential rival for fossil fuel. Nigeria, not just Dangote, is in deep trouble.
Denmark: The report from that country, after reminding us, as if we need the reminder, that “energy is one of the great engines of development”, also warned that “different nations and energy companies are working to bring new ways of generating and consuming energy…goodbye fossil fuel.” That was before the reader was told what this proposed new energy source is – Green Ammonia. Additionally, we learnt that 5,000 tons of this new “killer of petrol/diesel” is already available; so are prototypes of vehicles which would be powered by it.
So, as far as the Danes are concerned it is “goodbye fossil fuel and goodbye the petrol/diesel engine”.
Italy: Just in case you think the Danes are the only people who have turned their backs on fossil fuel, then read this; and your Nigerian heart will melt. Leopold Mozart, 1719-1781, father of Wolfgang Mozart, 1756-1791, one of the world’s greatest composers, once said that “Italians are rascals the world over.” From the standpoint of Nigeria’s economic interest, the Italians might have carried rascality too far. Otherwise, what do you make of the report by Ecoticals in Google on October 4, 2024, which proclaimed: “Ferrari presents an engine that violates the laws of physics. It’s upside down and burns water.” Obviously, if futuristic engines will be using ordinary water, the best investment anybody can make in Nigeria, right now, is to go and buy AQUADANA – not a refinery. In fact, a wise investor will turn down the offer to take Warri refinery for free because by the time that bunch of scrap metals starts producing fuel, nobody would want it.
USA: Surely nobody in his right senses would expect the Americans to leave the future for others to define. Uncle Sam must have its say; and it is talking from every part of its mouth. The loudest and most imminent statement was issued by a firm called Nichola One; which has developed an energy product called hydrogen-electric. Trust the Americans, they don’t do things by halves. The company has already introduced a vehicle – sleeper cab truck – which is already on sale in America.
Then there is California-based SoHyCal’s initiative which “employs an electrolysis procedure operated completely by renewable energy to generate hydrogen, which is demonstrably a fundamental progress shift of energy generation”. According to the reports coming fast and furious, these might not be the last words from God’s Own Country.
Japan: The “never say die” nation which rose from the ashes of destruction caused by two nuclear bombs, during World War II, to end America’s dominance in cars and light trucks. Trust the country which proved that the economy of scope could trump the economy of scale in manufacturing. Japan has two horses in the race – ethanol engine and hydrogen powered combustion engine. It matters not to Nigeria which one emerges winner.
China: The world’s largest cars and trucks manufacturing nation cannot be expected to leave it up to others to determine the types of engines that will power them. So, according to reports, “China finally unveils its great alternative to hydrogen…100 million tons of methanol.”
Germany: When German engineer, Nikolaus Otto, 1832-1891, pioneered the internal combustion engine as an alternative to steam engine in 1876, he started the Age of the Automobile and the largest industrial sector on Earth. Nobody should therefore expect the home of the Maybach, Mercedes-Benz, BMW and Volkswagen to sit back and allow others to determine the fates of its largest industries.
Predictably, “Germany has decisively turned towards methanol.” Germany is the largest economy in Europe; remember please.
There is no need to list seriatim what South Korea, Brazil, Britain, Sweden, India etc are planning to do. One thing is certain; collectively they have consigned refineries everywhere to the dustbin of history.
Just in case the reader thinks this is a warning about the ultimate fate of Nigerian refineries, permit me to give a hint before next week. It is an alarm on how Nigeria’s crude deposits are rapidly becoming worthless.
Peoplesmind
