The importation of refined petroleum products into Nigeria is going to continue alongside the production of the commodities by the Dangote Petroleum Refinery to prevent monopoly and ensure energy security, the Federal Government has declared.
It warned against being over-dependent on the $20 billion refinery located in the Lekki Free Zone in Lagos, stressing that the demand by the refinery that all oil marketers should buy products from the plant does not support competition.
This came as the House of Representatives constituted an ad-hoc committee to probe allegations of non-supply of crude oil to the Dangote refinery as oil marketers condemned the International Oil Companies (IOCs) operating in Nigeria for not supplying crude to indigenous refiners.
Also commenting on the issue, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) insisted that it was doing a lot to ensure the supply of crude to Dangote refinery and other modular refinery operators, as it vowed to resolve the lingering crisis.
The Nigerian Midstream and Downstream Petroleum Authority (NMDPRA), an agency of the Federal Government, said the government would not stop the importation of petroleum products, saying Nigeria cannot depend on one refinery to feed the nation.
The Chief Executive of NMDPRA, Farouk Ahmed, stated this in Port Harcourt while addressing newsmen, as the video of his address was made available to reporters on Thursday.
Ahmed also dismissed claims by the Dangote Group that international oil companies were frustrating the refinery by denying the refinery of crude supply, saying that the claim was not so.
He also revealed that the refinery, which had been selling diesel and aviation fuel in Nigeria for months, had not been licensed, stating that the Dangote refinery was still at the pre-commissioning stage.
“The claim by some media houses that there were steps to scuttle the Dangote refinery is not so. The Dangote refinery is still in the pre-commissioning stage. It has not been licensed yet; we haven’t licensed them yet. They are still in pre-commissioning. I think they have about 45 per cent completion”, Ahmed declared.
The NMDPRA boss warned that Nigeria cannot rely heavily on the Dangote refinery for its fuel supply.
According to him, the refinery had requested the regulator to stop giving import licences to other marketers so as to be the only fuel supplier in Nigeria.
“We cannot rely heavily on one refinery to feed the nation, because Dangote is requesting that we should suspend or stop the importation of all petroleum products, especially AGO, and direct all marketers to the refinery, that is not good for the nation in terms of energy security. And that is not good for the market, because of monopoly”, he stressed.
Efforts to reach the Dangote Group for reactions proved abortive.
The company spokesman, Tony Chiejina, did not answer repeated calls and did not reply to messages sent to him by one of our correspondents as of the time of filing this report.
IOCs probe
The House of Representatives has constituted an ad-hoc committee to probe allegations of non-supply of crude oil to Dangote Refinery and Petrochemicals Limited.
This followed the adoption of a motion of urgent public importance moved by the Minority Leader of the House, Kingsley Chinda, during plenary on Thursday.
Chinda who represents Obio Akpor Federal Constituency, Rivers State had in a motion on “Need to investigate alleged conspiracy by international oil companies to frustrate the operations and survival of Dangote Refinery and the actual percentage holding of the Federal Government in Dangote Refinery”, told his colleagues that the management of Dangote refinery recently accused IOCs operating in the country of conspiracy, “in an attempt to frustrate the smooth operations” of the company.
He stated, “The alleged conspiracy against the Dangote refinery relates to efforts by the IOCs to deliberately frustrate the refinery to buy local crude oil by manipulating and jerking up the premium price above the market price, thus forcing the refinery to reduce output, as well as import crude oil at very exorbitant cost from other countries, such as the United States, thereby, increasing the cost of production locally and increased product price”.
He also accused the IOCs of deliberately frustrating the Dangote refinery from buying crude at a time when the Nigeria Upstream Petroleum Regulatory Commission was trying its best to allocate crude to the company.
“While the IOCs are keen on exporting raw materials to their home countries and thus creating wealth and employment for their countries, thereby adding to their Gross Domestic Product, Nigeria continues to be a dumping ground for the refined products, thus making us dependent on imported petroleum products”, he added.
The Peoples Democratic Party chieftain called on relevant government agencies, NUPRC, and other critical stakeholders to support the refinery to succeed.
Chinda said, “While the Federal government of Nigeria subscribed 20 per cent shares in Dangote Refinery, the Chairman (Aliko Dangote) has claimed that Nigeria was unable to redeem its obligation and now owns 7.2 per cent through the Nigerian National Petroleum Company Limited.
“There is an urgent need to look into these allegations by the Dangote refinery and break all forms of dominance and monopoly of the petroleum sector by the IOCs and confirm the quantum of Federal Government interest in the refinery.
“Unless urgent steps are taken by the Federal government to investigate this matter and call the IOCs to order, the Dangote refinery and its operations would be prematurely pushed or forced out of business and this would not be good for us as a people”.
Following the support for the motion, the Speaker, Tajudeen Abbas, announced the constitution of an ad-hoc committee to be chaired by the member representing Nkanu East/Nkanu West Federal Constituency, Enugu State, Mr Nnolim Nnaji.
Other members of the committee are Kabir Amadu, Babajimi Benson, and Ghali Tijani, members representing Gusau/Tsafe, Ikorodu, and Albasu/Gaya/Ajingi Federal Constituencies of Zamfara, Lagos and Kano states respectively.
The committee was also tasked to investigate the inability of NNPCL to subscribe for the 20 per cent shares in the refinery and report back within four weeks for further legislative action.
Marketers react
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, tackled NNPCL and IOCs for not supplying enough crude to Dangote and modular refineries.
He said, “NNPC, a major exporter of crude oil, should have given Dangote some concessions because NNPC holds 7.2 per cent shares in that refinery. The concession should give Dangote an edge in crude purchases when compared to the international market price.
“We should have a local content quota for domestic refineries. It is very frustrating that Dangote, the largest refinery in Africa, is importing crude from the United States, Brazil, and others when we produce crude in Nigeria. The IOCs should stop frustrating that refinery”.
The Head of Public Affairs and Corporate Communications, NUPRC, Olaide Shonola, said the commission had been working hard to address the domestic crude supply crisis, stressing that it would continue to engage with the various stakeholders.
“We are attending to all these issues. The NUPRC is trying and they also alluded to this. We are trying to resolve this matter. We developed the crude oil obligation framework and many others to ensure that the (Dangote) refinery and others get crude.
“We are still supporting them and engaging the IOCs to see what can be done, but that is based on the willing-buyer and willing-seller principle. However, we will keep engaging them by meeting with them to resolve these issues”, she stated.
Asked to react to claims that IOCs sell a barrel of crude at about $4 higher than the NUPRC-approved price, Shonola replied, “I’ve sent this part to the person that will give me an answer and I’m awaiting his response. He is at the National Assembly because there was a summon. Maybe that is why he has not responded”.
Dangote laments
Earlier, The PUNCH reported that while accusing the IOCs of plans to frustrate the refinery, the Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, had also accused the NMDPRA of granting licences indiscriminately to marketers to import dirty refined products into the country.
According to Edwin, the Federal Government had issued 25 licences for the construction of refineries in Nigeria, but only the Dangote Group delivered on its promise.
The vice president noted that more than 3.5 billion litres of diesel and aviation fuel had been exported to Europe by the refinery in the past few months. The exported fuel, it was said, represented about 90 per cent of its production.
“The Federal Government issued 25 licences to build refineries and we are the only one that delivered on our 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 to create jobs and prosperity for the nation”, Edwin had stated.
Edwin fumed, “The decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in granting licenses indiscriminately for the importation of dirty diesel and aviation fuel has made the Dangote refinery expand into foreign markets.
“The refinery has recently exported diesel and aviation fuel to Europe and other parts 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”.
He noted that because the refinery meets the international standard as well as complies with stringent guidelines and regulations to protect the local environment, it has been able to export its products to Europe and other parts of the world.
“It is regrettable that in Nigeria, import licences are granted despite knowing that we can produce nearly double the amount of products needed in Nigeria and even export the surplus. Since January 2021, ECOWAS regulations have prohibited the import of highly contaminated diesel into the region” Edwin stated.
These claims of the Dangote official were refuted by the NMDPRA boss in the video seen on Thursday, as he declared that the imported products were not inferior.
