NMDPRA issues licences to operators to import unclean fuel—Dangote

Devakumar Edwin, Vice President of Oil and Gas of Dangote Industries Limited, has accused multinational oil firms in Nigeria of plotting to undermine the new Dangote Oil Refinery and Petrochemicals’ viability.

Edwin stated that the IOCs were “deliberately and willfully frustrating” the refinery’s efforts to purchase local crude by raising the cost over the market price, requiring the refinery to import crude from places as far away as the United States, with attendant high costs.Speaking to journalists during a one-day training event sponsored by the Dangote Group on Friday, Edwin accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority of providing licences to marketers indiscriminately to import unclean, refined products into the country.

According to Edwin, the Federal Government gave 25 licences for the development of refineries in Nigeria, but only the Dangote Group kept its promise.

The vice president stated that the refinery had shipped approximately 3.5 billion litres of diesel and aviation fuel to Europe in the previous several months, while begging for government assistance.

According to statistics, exporting fuel accounted for almost 90% of total output.

“The Federal Government issued 25 licences to build refineries, but we are the only ones who delivered on our promise.” In effect, we deserve all of the government’s help. Since manufacturing began, we have exported approximately 3.5 billion litres, accounting for 90% of our total output. We are urging the federal government and regulators to provide us with the resources we need to create jobs and prosperity for the country,” Edwin remarked.

He stated that, despite the Nigerian Upstream Petroleum Regulatory Commission’s best attempts to secure crude oil for the 650,000-capacity refinery, “the IOCs are deliberately and willfully frustrating our efforts to buy local crude.”

According to the Dangote official, the IOCs occasionally demanded that the refinery pay $6 more than the market price, forcing the company to limit output and import crude from nations such as the United States at a higher cost.

He stated, “Recall that the NUPRC recently met with crude oil producers and refinery owners in Nigeria in an effort to guarantee complete compliance with domestic crude oil supply responsibilities as outlined in Section 109(2) of the Petroleum Industry Act. It appears that the IOCs’ goal is to guarantee that our petroleum refinery fails. Either they are intentionally asking for an absurd or excessive charge, or they simply declare that crude is unavailable. At some point, we paid $6 more than the market price. This has caused us to cut our output and purchase oil from places as far away as the United States, raising our production expenses.

“It appears that the IOCs’ goal is to ensure that Nigeria continues to export crude oil and import refined petroleum products. They (IOCs) are interested in exporting raw materials to their home countries, creating jobs and riches for their countries, increasing their gross domestic product, and dumping expensive refined products into Nigeria, leaving us reliant on imported goods.

The multinational corporations have followed the same method in every commodity, inflicting unemployment and poverty in Nigeria and Sub-Saharan Africa while gaining riches for themselves at our expense.

“This is exploitation, pure and simple. Unfortunately, by continuing to provide import licences at the expense of our economy and the health of Nigerians exposed to carcinogenic products, the country is playing right into their hands.

Even though Dangote is producing and bringing diesel into the market in accordance with the Economic Community of West African States’ regulations, “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, European Union, and the United Kingdom imposed a price cap scheme on February 5, 2023, on Russian petroleum products, a large number of vessels are waiting near Togo with Russian ultra-high sulphur diesel, which they are purchasing and dumping into the Nigerian market,” Edwin told me.

“Some European countries were so concerned about the carcinogenic effects of the extra-high sulphur diesel being poured into the Nigerian market that Belgium and the Netherlands recently banned such fuel from being sold from their country into West Africa. Unfortunately, the country is issuing import licences for such toxic diesel to be brought into Nigeria, despite the fact that we have more than ample petroleum refining capability locally.”

He remembered that in May, Belgium and the Netherlands enacted new quality requirements to prohibit the shipment of low-quality fuels to West Africa, aligning their standards with those of the European Union.

According to Edwin, these restrictions synced fuel export regulations with the European home market, focusing on diesel and petrol with high sulphur and chemical content.

Historically, he described how these fuels, which had sulphur content of up to 10,000 ppm, were exported at cheaper rates to countries such as Nigeria and other West African consumers.

He noted that Belgium’s Minister of Environment, Zakia Khattabi, announced that his country would follow the Netherlands in prohibiting the export of low-quality fuel and diesel to West Africa via Amsterdam and Rotterdam ports in April 2023.

He reported Khattabi as saying, “For far too long, harmful fuels have been exported from Belgium to locations such as Africa. They pollute the air in countries like Ghana, Nigeria, and Cameroon and are even carcinogenic.”

 

Edwin described how a September 2017 study by the international organisation Public Eye discovered that dirty and dangerous fuels were being exported on a big scale from the ports of Rotterdam and Amsterdam to African markets.

He emphasised that up to a quarter of the petrol and diesel available in West Africa came from the ports of Amsterdam, Rotterdam, and Antwerp, and that these fuels contained sulphur and other pollutants, such as cancer-causing benzene, in quantities up to 400 times the limits allowed in Europe.

Edwin fumed, “The decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority to award licences indiscriminately for the importation of unclean diesel and aviation fuel has caused 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 battled us for lowering the price of diesel and aviation fuel, but as I have stated, our goal is to build our economy.”

He stated that because the refinery fulfils international standards and follows strict norms and laws to safeguard the local environment, it has been allowed to export its goods to Europe and other parts of the world.

While urging the Federal Government and the National Assembly to intervene urgently to ensure the PIA’s prompt implementation and the protection of Nigeria’s 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 can manufacture nearly double the number of things required in Nigeria and export the surplus. Since January 2021, ECOWAS regulations have restricted the importation of highly polluted diesel into the area.

According to The PUNCH, Aliko Dangote, President of the Dangote Group, recently accused some prominent individuals of sabotaging his refinery, and that the IOCs were denying him access to crude oil.

“In a system where people have been counting good money for 35 years and suddenly realise that the days of counting that money are over, you don’t expect them to pray for you. Naturally, you expect them to fight back.

“I believe that is the process that we are currently going through. However, the truth is that the country, sub-region, and continent of Sub-Saharan Africa require this refinery. So you expect them to fight through non-supply of crude and non-purchase of the product, but I believe this is just temporary. “We’ll get there,” Aliko said.

Dangote recalls being persuaded by Khalid Al-Falih, Saudi Arabia’s former Minister of Energy, to abandon plans to build a refinery. However, he stated that he informed the former minister that he did not require his advise.

“Four years ago, I was in Saudi Arabia during the fasting time, and I was asked to the fast-breaking ceremony. Dr. Falih, who was then the Minister of Energy, invited me to come and break the fast with him, and I attended. He just remarked, “Aliko, I heard you’re planning on building a refinery; what capacity?” I mentioned 650,000. He remained silent for a time before saying, “You know, around 120 kilometres from Mecca, we are building one, and I think I would like you to go and take a look. We, at Saudi Aramco, are confronting numerous obstacles and are moving forward, but I advise you not to do so because refineries are typically developed by huge oil firms or sovereign governments.

“I said, ‘But Your Excellency, we have already begun, therefore I am not waiting for advise.’ That was how we continued,” he explained.

Dangote said that both local and international cartels, which he referred to as the “mafia,” repeatedly attempted to destroy the $19 billion refinery project in Lagos.

“I knew there was going to be a battle. But I had no idea that the mafia in oil was greater than the mafia in narcotics. I can tell you that. “Yes, it’s true,” he said.

Dangote, who identified himself as a fighter, claimed they attempted everything to stop him.

“In reality, during the COVID time, certain international banks were looking forward to forcing us to default on our loans, thereby killing the initiative. And that did not happen with the assistance of banks such as Afreximbank,” the statement read.

According to The PUNCH, despite its massive crude oil reserves, Nigeria continues to rely largely on imported refined petroleum.

However, Dangote has stated that Nigeria will no longer import fuel by the third week of July, when he begins selling PMS.

Efforts to get the IOCs to respond to the development through the Lagos Chamber of Commerce and Industry’s Oil Producers Trade Section were fruitless.

Chinyere Almona, the Director-General of the LCCI, had not to respond to a text addressed to her on the subject as of the time this story was produced, and her phone number remained unavailable.

Also, when contacted, NMDPRA spokesperson George Ene-Ita requested more information about the Dangote official’s assertions. This was forwarded to him, but he had yet to respond at the time this report was filed.