In 2023, Nigeria’s imports of petroleum products from Malta surged by 342% to $2.08 billion. This dramatic boost comes amid allegations from Aliko Dangote, Chairman of Dangote Group, indicating that officials from the Nigerian National Petroleum Company Limited (NNPC) own blending plants in Malta.

Data released by Statisense on its X account outlines Nigeria’s petroleum imports from 2013 to 2023, with figures consistent with those from Trade Map, a global trade database.

Analysis reveals that Nigeria’s petroleum imports from Malta totaled about $237.81 million from 2013 to 2016. However, there were no imports from Malta between 2017 and 2022. In a notable shift, imports surged to $2.08 billion in 2023, according to Statisense data.

The Oil Supply Chain
Nigeria’s oil sector plays an important role in its economy, encircling a multi-stage process of extraction, processing, transportation, exportation, and sale. Oil is extracted via drilling rigs and then transported internationally to refineries, where it is processed into different refined products.

These products are then moved to storage tanks, blending facilities, and ports, commonly through pipelines or ships. At the ports, oil is loaded onto tankers for shipment to Nigeria and other destinations.

Domestically, refined oil is sold to buyers at prices set by importers, often referred to as “oil marketers,” with significant government subsidies in place to keep prices inexpensive for consumers.

Current Developments
Recent developments in Nigeria’s oil sector have raised worries. The purchase of Nigerian Agip Oil Company by Oando PLC, a Nigerian energy company predominantly owned by President Tinubu’s family and led by Wale Tinubu, suggests the organisation has moved ownership to private interests.

Agip Oil, previously part of the Italian multinational Eni S.p.A., operates 17 onshore oil blocks and oversees the Bonny natural gas station plant. Rather than investing in local refining capacity, the new owners have opted to build a refinery in Malta.

This move allows for a possible exploitation of Nigeria’s oil resources while concealing operations through complex international arrangements.

Oando PLC, under the leadership of Wale Tinubu, has encountered scrutiny due to its ownership structure and the substantial impact of the Tinubu family.

This acquisition and plans to relocate refining operations abroad have heightened debates about transparency, national resource management, and the broader implications for Nigeria’s economy and sovereignty.

Financial Manipulation and Hidden Subsidies
A current policy shift removed the public fuel subsidy, yet covert backing continued, leading to enhanced prices for petroleum products and satisfying those with tangible market control.
The purchase of Agip Oil by Oando PLC has placed the new players as the largest oil exporters, explorers, and marketers in Nigeria, next to NNPC.

The Exploitation Scheme
The current strategy involves selling Nigerian oil at reduced prices to international refineries and then re-importing the refined products at higher costs.
These refined products are traded domestically at inflated prices, with the subsidy, though officially removed, still being covertly provided. This structure allows for substantial financial gain through a self-serving subsidy system.

The sale of over $2 billion worth of petroleum products to Nigeria through the Maltese refinery in 2023 alone underscores the extent of this exploitation.
Resistance to Competition
Recent efforts to influence competing refining projects, such as the Dangote refinery, further suggested a desire to retain control over the sector.
Aliko Dangote, owner of Dangote Refinery, had previously accused authorities and international oil companies of obstructing crude oil supplies to his $20 billion facility located in the Lekki Free Trade Zone near Lagos.
Regulatory bodies have also questioned the quality of the refinery’s products, Dangote maintained that his refinery produces superior quality compared to imported alternatives.
As fuel prices continue to increase, the alleged covert subsidy payments reflect a troubling level of exploitation. The crisis is alarming and raises serious worries about the future of Nigeria’s oil industry and its broader economic implications.