Lolorito isn't all-powerful,

In the Culinarian quest line, of all things, he tries to get revenge upon you by making you look like a bad cook in front of the Sultana (no, seriously). When she figures this out he backs-off rather than risk being rebuked by her in public.


I think he's got a lot of behind-the-scenes power but popular support is still with the Sultana and I think he's afraid of that.