Dangote Refinery accuses IOCs of sabotaging its operations

The Vice President of Oil and Gas of Dangote Industries Limited, Devakumar Edwin, stated that the IOCs are purposely driving up the price of local crude oil above market rates, forcing the refinery to import crude from as far away as the United States at considerably higher prices.

Edwin complained that the IOCs appear to be focused on ensuring that Nigeria continues to export crude oil and import refined petroleum products rather than establishing domestic refining capability.

Furthermore, the Dangote Refinery has accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of continuing to issue licences to import banned unclean diesel and jet fuel, undermining the refinery’s efforts to supply the domestic market.

The Dangote Refinery, Africa’s largest, has had considerable difficulty in getting a consistent supply of crude oil, delaying its scheduled start-up. To meet its needs, the refinery has had to rely on crude oil imports, raising operational expenses.

Speaking to a group of Energy Editors at a one-day training programme organised by the Dangote Group, Edwin also criticised the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for granting indiscriminate licences to marketers to import dirty refined products into the country.

He said, “the Federal Government issued 25 licences to build refinery and we are the only one that delivered on promise. In effect, we deserve every support from the Government. It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 per cent of our production, have been exported. We are calling on the Federal Government and regulators to give us the necessary support in order to create jobs and prosperity for the nation.”

According to him: “While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude. It would be recalled that the NUPRC, recently met with crude oil producers as well as refineries owners in Nigeria, in a bid to ensure full adherence to Domestic Crude Oil Supply Obligations (DCSO), as enunciated under section 109(2) of the Petroleum Industry Act (PIA).

“It seems that the IOCs’ objective is to ensure that our petroleum refinery fails. It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude is not available. At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production…

“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports crude oil and imports refined petroleum products. They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries, adding to their GDP, and dumping the expensive refined products into Nigeria – thus making us to be dependent on imported 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 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.

“In spite of the fact that we are producing and bringing out diesel into the market, complying with ECOWAS regulations and standards, licences are being issued, in large quantities, to 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 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 fuel 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…”

Recall that in May, Belgium and Netherland adopted new quality standards to halt the export of cheap, low-quality fuels to West Africa, harmonising its standards with those of the European Union.

These measures synchronise fuel export standards with the European domestic market, specifically targeting diesel and petrol with high sulphur and chemical content. Historically, these fuels, with sulphur content reaching up to 10,000 ppm, were exported at reduced rates to countries like Nigeria and other West African consumers.

Belgium’s Minister of Environment, Zakia Khattabi, announced that his country followed the Netherland, which in April 2023 also prohibited the export of low-quality petrol and diesel to West Africa via the ports of Amsterdam and Rotterdam.

Khattabi emphasised that the Netherlands’ decision to restrict dirty fuel exports had redirected the trade to Belgium, now used by oil producers and traders to export gasoline with excessively high levels of benzene and sulphur.

“For far too long, toxic fuels have been departing from Belgium to destinations including Africa. They cause extremely poor air quality in countries such as Ghana, Nigeria, and Cameroon and are even carcinogenic,” said Khattabi.

In September 2017, an investigation by the international charity Public Eye found that dirty and poisonous fuels were being exported on a large scale from the ports of Rotterdam and Amsterdam to African markets.

Up to 25% of the petrol and diesel accessible in West Africa comes from the ports of Amsterdam, Rotterdam, and Antwerp.

These fuels include sulphur and other pollutants, such as cancer-causing benzene, in concentrations up to 400 times those allowed in Europe.

The Netherlands and Belgium were ordered to enforce restrictions to protect millions of Africans from exposure to harmful fuels.

The decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to give licences indiscriminately for the importation of filthy diesel and aviation fuel has prompted the Dangote refinery to expand into overseas markets.

The refinery recently shipped diesel and aviation fuel to Europe and other regions of the world.

The same industry players fought us for crashing the price of diesel and aviation fuel, but our aim, as I have said earlier, is to grow our economy, the press release by Dangote Group stated

It noted that the refinery has been able to sell its products to Europe and other parts of the world because it fulfils international standards and adheres to strict norms and laws to protect the local environment.

While urging the Federal Government and the National Assembly to intervene urgently to ensure the PIA’s prompt implementation and the protection of Nigeria and Nigerians’ interests, he stated: “Recently, the government of Ghana, through legislation, banned the importation of highly contaminated diesel and PMS into their country. It is unfortunate that import licences are given in Nigeria despite the fact that we have the capacity to create roughly double the number of products required in Nigeria and export the surplus. Since January 2021, ECOWAS regulations have restricted the importation of highly polluted diesel into the area.