The controversy surrounding the circulation of ‘dirty fuel’ in Nigeria has escalated, with Dangote Refinery and fuel marketers exchanging accusations over the quality of diesel being imported and sold in the country. ‘Dirty fuel’ refers to contaminated fuel with sulphur content exceeding the 200 parts per million (ppm) limit set by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The issue has reignited concerns about fuel quality and regulatory compliance in the Nigerian market.
Dangote Refinery’s Accusations
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), recently accused the NMDPRA of indiscriminately granting licences to marketers, allowing the importation of substandard diesel.
Edwin stated, “Despite our efforts to produce diesel that meets ECOWAS regulations and standards, large quantities of ultra-high sulphur diesel from Russia are being imported into Nigeria under licences issued by NMDPRA.”
Edwin further explained that the sanctions imposed by the US, EU, and UK on Russian petroleum products since February 5, 2023 have led to an influx of high sulphur diesel being diverted to West Africa.
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“Numerous vessels loaded with Russian diesel are stationed near Togo, and the fuel is being dumped in the Nigerian market.
“This diesel is so hazardous that countries like Belgium and the Netherlands have banned its export to West Africa due to its carcinogenic effects,” Edwin said.
He expressed dismay at Nigeria’s continued issuance of import licences for such diesel, despite the country’s sufficient local refining capacity.
Edwin noted, “Belgium and the Netherlands adopted new quality standards in May to stop the export of low-quality fuels to West Africa, aligning their standards with the EU.
“Historically, these fuels, with sulphur content as high as 10,000 ppm, were exported to countries like Nigeria at lower prices.”
DAPPMAN’s Response
In response, the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) firmly denied Edwin’s allegations.
In a statement, DAPPMAN asserted that “no member of the association, nor any private fuel depot, has imported fuel outside the specifications approved by NMDPRA.”
The association criticised Dangote Refinery for disseminating what it termed “inaccurate information.”
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It pointed out that NMDPRA had previously restricted ship-to-ship fuel transfers off the coast of Lome, a practice crucial for downstream operators. This restriction, initially protested by the industry, was eventually lifted.
Regulatory and Market Dynamics
DAPPMAN highlighted that between February and May 2024, NMDPRA permitted AGO imports with a maximum sulphur content of 200 ppm. However, the regulator then moved the target date for implementing a stricter 50 ppm sulphur limit from 31st December 2024 to 1st June 2024.
This adjustment, DAPPMAN noted, would force marketers to rely solely on Dangote Refinery, which had not yet installed the necessary desulphurisation equipment to meet the new standard.
DAPPMAN alleged that Dangote’s current AGO blend exceeds 50 ppm, with some batches reportedly containing sulphur levels of 1200 ppm, categorising it as ‘dirty fuel.’
“It is baffling that Dangote, aware of these facts, would accuse NMDPRA of allowing the importation of substandard diesel,” DAPPMAN stated.
Pricing Strategy and Fair Competition
The association also condemned Dangote Refinery’s pricing strategy, claiming it favoured international buyers over local marketers.
“Several Nigerian marketers have been offered Dangote Refinery cargoes by international trading firms at rates significantly lower than those offered directly by Dangote. This practice is detrimental to Nigerian consumers,” the association said.
DAPPMAN emphasised the importance of fair competition in the fuel market, in accordance with the Petroleum Industry Act 2021, which opposes monopolies.
“While the success of Dangote Refinery is a source of national pride, all operators must comply with the law to ensure healthy competition and safe, affordable fuel for Nigerians,” it stressed.
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Commitment to Collaboration
The association reaffirmed its commitment to collaborating with all stakeholders, including Dangote Refinery, to provide safe and competitive fuel options for Nigerians.
It stated, “DAPPMAN will continue to work with all parties to ensure the availability of healthy fuels, fostering a market that benefits the Nigerian consumer.”
The ongoing dispute highlights the challenges facing Nigeria’s petroleum industry, where regulatory enforcement and market dynamics are in constant flux.
As the country strives to balance local production with importation, the focus remains on ensuring fuel quality and safeguarding public health.
