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Dangote Alleges IOCs Frustrating Refinery Operations

… Accuses NMDPRA Of Issuing Licences For Dirty Fuel Imports

 Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, has accused International Oil Companies (IOCs) of deliberately undermining the operations of the newly established Dangote Oil Refinery and Petrochemicals. 

Speaking at a one-day training programme organized by the Dangote Group, Edwin outlined the various ways in which IOCs are allegedly obstructing the refinery’s ability to secure local crude oil, thereby inflating operational costs and threatening the refinery’s survival.

Edwin claimed that IOCs are intentionally hiking the price of local crude oil above market rates, forcing the Dangote refinery to import crude from distant sources such as the United States. 

This practice, according to Edwin, not only increases operational costs but also reduces the refinery’s output.

 He revealed that at times, the refinery had to pay up to $6 per barrel above the market price, a cost that has significantly strained their operations.

“Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently met with crude oil producers and refinery owners in Nigeria to ensure adherence to Domestic Crude Oil Supply Obligations as mandated under section 109(2) of the Petroleum Industry Act. 

Despite these efforts, IOCs are either demanding exorbitant premiums or claiming unavailability of crude, clearly aiming to ensure our refinery’s failure,” Edwin stated.

Despite these challenges, Edwin highlighted that the Dangote refinery has successfully exported over 3.5 billion litres of diesel and aviation fuel, primarily to European markets.

 This volume represents about 90 percent of the refinery’s production, underscoring the high standards and quality of its products. 

Edwin urged the Nigerian government to support the refinery, emphasizing its potential to create jobs and boost the national economy.

Edwin did not spare the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) from criticism, accusing it of granting licences indiscriminately for the importation of substandard refined products into Nigeria. 

He claimed that these actions are counterproductive, especially when the Dangote refinery can produce sufficient fuel to meet domestic demand and even export surplus.

“Licences are being issued in large quantities to traders who import high-sulphur diesel from Russia, which is then dumped into the Nigerian market. 

This not only undermines our operations but also poses significant health risks to Nigerians due to the carcinogenic nature of these products,” Edwin explained.

He pointed to recent measures by Belgium and the Netherlands to halt the export of low-quality fuels to West Africa as an example for Nigeria to follow.

 These European countries have aligned their export standards with stringent domestic regulations to prevent the spread of toxic fuels.

 

Reflecting on the journey of establishing the $19 billion refinery, Aliko Dangote, President of the Dangote Group, recounted the resistance faced from both local and international entities.

 He revealed that there were concerted efforts to sabotage the project, including attempts by international banks to push the company into loan defaults during the COVID-19 pandemic.

“Both local and international cartels, which I describe as ‘mafia,’ made numerous attempts to derail our refinery project. But we persevered, thanks in part to support from institutions like Afreximbank,” Dangote noted.

He emphasized the critical need for the refinery, not only for Nigeria but for the entire sub-Saharan Africa region. Dangote reiterated his commitment to the project, dismissing past advice to abandon the refinery.

 

Looking ahead, Dangote expressed optimism that the challenges faced are temporary.

He called on the Nigerian government and the National Assembly to expedite the implementation of the Petroleum Industry Act (PIA) to protect national interests and ensure the refinery’s success.

“It is regrettable that import licences for substandard fuels are still being granted despite our capacity to produce and meet Nigeria’s fuel needs. 

“We need urgent intervention to safeguard our economy and health,” Edwin asserted.

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