The effort by the Dangote Refinery to end the continued importation of refined petroleum products in the country through local refining of the commodity is being sabotaged by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the multinational oil companies operating in the country, the management of Dangote Industries Limited (DIL) alleged.
The Vice President, Oil and Gas, at DIL, Devakumar Edwin, who made the allegation at the weekend in an interaction with reporters said both the Downstream/Midstream Petroleum industry regulator and the multinational Oil Companies in the country were engaging in various activities deliberately to frustrate the take off and survival of Dangote Oil Refinery and Petrochemicals Company.
Edwin said the area the international oil companies were sabotaging the DIL operations was suffering the greatest frustration was in their deliberately and wilfully undermining the efforts to procure the local supply of crude oil by raising the premium price above the prevailing market price, compelling the company to resort to importation of the commodity from United States and countries at exorbitant costs.
Also, Edwin criticised the NMDPRA for indiscriminately granting licences to petroleum products marketers to import dirty or off-spec refined products into the country.
“The least we would have expected from NMDPRA, which is the downstream sector regulatory authority, would have been an encouragement to Dangote Refinery to operate and survive to help end the inglorious era of petroleum products importation in the country.
Out of the 25 licences the Federal Government issued to various investors to build private refineries in the country, the Dangote Refinery is the only one that delivered on promise. All that the company deserves is every support from the government and its agencies to continue to operate and frustrations,” the official lamented.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is trying their best to ensure crude oil is allocated to us, the IOCs are doing everything to deliberately and willfully frustrate our efforts to buy local crude at the right price,” the official added.
He however disclosed that despite the frustrations, since the commencement of production of petroleum products from the refinery, more than 3.5 billion litres of refined products, representing about 90 percent of its total production, have been exported without the support the Federal Government and regulators.
Recently, in a bid to ensure full adherence to the provisions of the Domestic Crude Oil Supply Obligations (DCSO) stipulated under Section 109(2) of the Petroleum Industry Act (PIA), to guarantee uninterrupted supply of crude oil for local refining, he said the NUPRC directed crude oil producers and owners of refineries in the country to ensure they complied with the requirements of the law.
He accused the IOCs of pursuing a negative agenda to ensure the Dangote Refinery failed, to allow for the continued importation of petroleum products into the country
“It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude oil is not available for supply to Dangote Refinery. At some point, we paid $6 over and above the prevailing market price per barrel. This forced us to reduce our output as well as import crude oil from countries as far as the US, thereby increasing our cost of production.
“It appears that the objective of the IOCs is to ensure Nigeria remains a country that exports crude oil, while importing refined petroleum products. They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries’ economies, boosting their gross domestic products, and dumping the expensive refined products into Nigeria – thus making the country continue to depend on imported refined petroleum products.
“It is the same strategy the multinationals have been adopting in every commodity, making Nigeria and Sub-Saharan Africa to be facing unemployment and poverty, while they create wealth for themselves at our expense. This is exploitation – pure and simple. “Unfortunately, the country, through its regulatory agency, is also playing into their hands by continuing to issue import licences at the expense of our economy and at the cost of the health of the Nigerians who are exposed to carcinogenic products imported into the country.
“In spite of the fact that we are producing and bringing out diesel into the market, complying with the Economic Community of West African States (ECOWAS) regulations and standards, licences are being issued, in large quantities, to oil traders who are buying the extremely high sulphur diesel from Russia and dumping it in the Nigerian Market. Since the US, EU and UK imposed a Price Cap Scheme from 5th February, 2023 on Russian Petroleum Products, a large number of vessels are waiting near Togo waters with Russian ultra-high sulphur diesel and, they are being purchased and dumped into the Nigerian Market.
“In fact, some of the European countries were so alarmed about the carcinogenic effect of the extra high sulphur diesel being dumped into the Nigerian Market that countries, like Belgium and the Netherlands, imposed a ban on such off-spec fuels being exported from its country, into West Africa, recently. It is sad that the country is giving import licences for such dirty diesel to be imported into Nigeria, when we have more than adequate petroleum refining capacity locally…”
Edwin said the decision of the NMDPRA to grant licenses indiscriminately to oil marketers for the importation of dirty diesel and aviation fuel into the country has made the refinery to expand its operations into foreign markets.
The refinery, he said, recently exported diesel and aviation fuel to Europe and other parts of the world, despite attempts to also frustrate such efforts by the same industry players for crashing the price of diesel and aviation fuel.
Because the refinery meets the international standard as well as comply with the stringent guidelines and regulations to protect the local environment, he said the company has been able to export its products to Europe and other parts of the world.
He appealed to the Federal Government and the National Assembly to urgently intervene in the crisis and ensure that the provisions of PIA to promote local refining of petroleum products were speedily implemented in the interest of Nigeria and Nigerians.
He cited the experience in neighbouring Ghana, where the government, through legislation, recently banned the importation of highly contaminated diesel and premium motor spirit (PMS), popularly called petrol, into their county, adding that it was regrettable that Nigeria was rather encouraging the issuance of import licences to oil marketers to import products into the country, d despite the country’s capacity to produce nearly double the volume of products required for local consumption, while exporting the surplus.
Besides, he said since January 2021, ECOWAS regulations have prohibited the importation of highly contaminated diesel into any part of the region.