Key Points
- Dangote accuses International Oil Companies (IOCs) of inflating local crude prices to sabotage the Dangote Oil Refinery.
- Dangote condemns the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for allowing the import of substandard refined products despite the refinery’s compliance with ECOWAS regulations.
- Dangote says that IOCs aim to keep Nigeria dependent on imported refined products, creating jobs and wealth in their home countries while exploiting Nigeria, and urges similar measures to Ghana’s ban on contaminated diesel imports.
- Dangote calls on the Nigerian government to expedite the Petroleum Industry Act (PIA) and align with ECOWAS regulations to protect local interests and public health.
Vice President of Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, has accused International Oil Companies (IOCs) in Nigeria of deliberately sabotaging the Dangote Oil Refinery and Petrochemicals.
Edwin asserts that IOCs are obstructing the refinery’s ability to procure local crude by inflating premium prices above market rates, compelling the refinery to import crude from distant countries such as the United States, which significantly increases costs.
Importation of Substandard Diesel
Despite producing and marketing diesel that complies with ECOWAS regulations, Edwin lamented that licences are being issued for traders to import highly sulphuric diesel from Russia.
“Since the US, EU, and UK imposed a price cap on Russian petroleum products from February 5, 2023, vessels carrying ultra-high sulphur diesel have been offloading in Togo and then being imported into Nigeria,” Edwin stated.
He stressed that these imports undermine local refining efforts and pose significant health risks.
European Concerns over Toxic Fuel Exports
European countries have raised alarms over the export of toxic fuels to West Africa. Edwin noted that Belgium and the Netherlands recently banned the export of high-sulphur diesel to West Africa due to its carcinogenic effects.
“Belgium and the Netherlands have aligned their fuel export standards with the European Union, banning the export of low-quality fuels with high sulphur content to West Africa,” Edwin explained.
Belgium’s Minister of Environment, Zakia Khattabi, emphasised the harmful impact of these toxic fuels on air quality and public health in countries like Nigeria.
Historical Context of Polluted Fuel Exports
A 2017 investigation by Public Eye revealed that polluted fuels were being exported in large quantities from ports in Rotterdam and Amsterdam to African markets. These fuels contain pollutants up to 400 times the limits allowed in Europe, causing significant health risks, including cancer.
Edwin highlighted the adverse effects of NMDPRA’s licensing decisions on the Dangote refinery, which has begun exporting its high-quality diesel and aviation fuel to Europe and other markets.
IOCs’ Strategy to Frustrate Local Procurement
Speaking at a one-day training programme organised by the Dangote Group for Energy Editors, Edwin criticised the IOCs for their deliberate actions to impede the refinery’s operations.
He revealed that these companies are artificially raising the price of local crude, making it unaffordable for the Dangote Refinery.
“The IOCs are demanding exorbitant premiums or claiming that crude is unavailable, which forces us to import crude from countries like the United States at a higher cost,” Edwin said.
Also read: Dangote Refinery: Too Big to Fail
This tactic, he notes, is a calculated move to ensure that the Dangote Refinery fails to thrive on local crude supplies.
Regulatory Challenges with NMDPRA
Edwin also pointed out issues with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which he accuses of indiscriminately granting licences to marketers to import substandard refined products into Nigeria.
“The Federal Government issued 25 licences to build refineries, and we are the only ones who delivered on our promise. We deserve full support from the government,” Edwin emphasised.
He stressed that the refinery has exported over 3.5 billion litres of refined products, representing 90 per cent of its output, and called for government support to foster job creation and economic growth in Nigeria.
Struggles with Domestic Crude Allocation
Edwin highlighted the efforts of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to allocate local crude to the refinery. However, he noted that the IOCs have been a significant hindrance.
“The IOCs are making it difficult by demanding exorbitant premiums or claiming crude is unavailable. At one point, we paid $6 above the market price, which has forced us to import crude from the US, increasing our production costs,” he explained.
Dependency on Imported Refined Products
Edwin accused the IOCs of wanting Nigeria to remain an exporter of crude oil and an importer of refined products.
“IOCs prefer exporting raw materials to their home countries, creating jobs and wealth there, while dumping expensive refined products in Nigeria, thus making us dependent on imports. This is pure exploitation,” Edwin said.
Also read: Dangote Refinery Needs Government’s Help Not Hindrance -Rewane
He criticised the country’s complicity in this situation by continuing to issue import licences, which he claims harm the economy and expose Nigerians to harmful products.
Expanding into Foreign Markets
Edwin emphasised that the Dangote Refinery has expanded its operations into foreign markets due to these challenges.
“Our aim is to grow our economy, and despite efforts to undermine us, we meet international standards and comply with stringent regulations to protect the local environment,” he said.
He noted that the refinery has successfully exported its products to Europe and other parts of the world, complying with international standards and regulations.
Appeal for Government Intervention
He called on the Federal Government and the National Assembly to expedite the implementation of the Petroleum Industry Act (PIA) to protect Nigerian interests.
He praised Ghana for recently banning the import of contaminated diesel and PMS, contrasting it with Nigeria’s continued issuance of import licences despite having sufficient refining capacity to meet domestic demand and export surplus.
“Recently, the government of Ghana, through legislation, has banned the importation of highly contaminated diesel and PMS into their country. It is regrettable that, in Nigeria, import licences are granted despite knowing that we have the capacity to produce nearly double the amount of products needed in Nigeria and even export the surplus,” Edwin lamented.
ECOWAS Regulations and Compliance
He highlighted that since January 2021, ECOWAS regulations have prohibited the import of highly contaminated diesel into the region, yet Nigeria persists in granting import licences, undermining local industry and public health.
“It is unfortunate that Nigeria continues to permit these imports when we have adequate local refining capacity,” he said, urging the Nigerian government to align with ECOWAS regulations and prioritise the health and economic well-being of its citizens.
The accusations by Devakumar Edwin underscore the complex dynamics and challenges faced by the Dangote Refinery in its quest to operate efficiently within Nigeria.
The interplay between international oil companies, regulatory bodies, and government policies highlights the need for a cohesive strategy that supports local industries and protects public health.
As the Dangote Refinery continues to navigate these challenges, its calls for government intervention and regulatory compliance remain crucial for the future of Nigeria’s oil and gas industry.
