LAGOS, Nigeria — Local and international vested interests are allegedly working to thwart the progress of the newly established Dangote Oil Refinery and Petrochemicals, which is seen as Nigeria’s key hope for reducing petroleum product prices.
These prices have been a significant factor in the country’s high cost of living, including escalating food prices.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, has particularly accused International Oil Companies (IOCs) in Nigeria of actively frustrating the refinery’s efforts to purchase local crude oil.
Edwin claims that these companies are deliberately inflating the cost of local crude above market prices, forcing the refinery to import crude from distant countries like the United States, incurring higher costs.
“The IOCs are deliberately and willfully frustrating our efforts to buy the local crude,” Edwin said.
“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.”
He further criticised the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for indiscriminately granting licenses to marketers to import low-quality refined products into the country.
Edwin lamented that despite the Dangote refinery’s compliance with regulations and its substantial contribution to the economy, it faces significant hurdles.
“The Federal Government issued 25 licenses to build refineries and we are the only one that delivered on our promise. In effect, we deserve every support from the government. From the start of production, more than 3.5 billion liters, which represents 90 percent of our production, have been exported,” Edwin said.
“We are calling on the Federal Government and regulators to give us the necessary support to create jobs and prosperity for the nation.”
Edwin explained that the refinery has been compelled to export more than 3.5 billion liters of diesel and aviation fuel to Europe in the past few months due to local market challenges.
He asserted that the objective of the IOCs seems to be ensuring Nigeria remains an exporter of crude oil and an importer of refined petroleum products, thereby perpetuating unemployment and poverty in the country.
“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,” he added.
“They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries, adding to their Gross Domestic Product, and dumping the expensive refined products into Nigeria – thus making us dependent on imported products.”
He also expressed concern over the importation of high-sulfur diesel from Russia, facilitated by indiscriminate licensing by NMDPRA, which poses significant health risks to Nigerians due to its carcinogenic properties.
“Since the US, European Union, and the United Kingdom imposed a price cap scheme from February 5, 2023, on Russian petroleum products, a large number of vessels are waiting near Togo with Russian ultra-high sulfur diesel, and they are being purchased and dumped into the Nigerian market,” Edwin said.
“Some European countries have banned such fuel exports to West Africa due to their carcinogenic effects. Unfortunately, Nigeria continues to grant import licenses for such dirty diesel.”
Despite these challenges, Edwin emphasized that the Dangote refinery adheres to international standards and regulations, which has enabled it to export its products to Europe and other parts of the world.
While appealing to the Federal Government and the National Assembly for urgent intervention, Edwin highlighted Ghana’s legislative measures to ban the importation of highly contaminated diesel and urged Nigeria to follow suit.
In a related development, Aliko Dangote, President of the Dangote Group, recently accused some powerful individuals and IOCs of frustrating his refinery, adding that the IOCs were denying him access to crude oil.
“In a system where, for 35 years, people are used to counting good money, and all of a sudden, they see that the days of counting that money have come to an end, you don’t expect them to pray for you. Of course, you expect them to fight back,” Dangote said.
“But the truth is that the country, the sub-region, and also the continent of sub-Saharan Africa need this refinery.”
Efforts to get the IOCs to react to the development through the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry were unsuccessful.
As of the time this report was filed, the spokesperson of NMDPRA, George Ene-Ita, had yet to respond to a request for comments on the Dangote official’s claims.
As Nigeria continues to grapple with its dependency on imported fuel, the Dangote refinery stands as a beacon of hope for economic transformation, provided it receives the necessary support and fair treatment from local and international stakeholders.
