The plan by the Dangote Oil Refinery Company to roll out petrol, diesel and aviation fuel into the Nigerian market soon may be vitiated by the alleged sabotage of International Oil Companies (IOCs) operating in the country. The $20 billion facility, which was commissioned last year with fanfare, has a production capacity of refining 650,000 barrels of crude oil per day. The management of the refinery disclosed recently that in the past few months, more than 3.5 billion of diesel and aviation fuel from the plant had been exported to Europe.
However, the expectation of lower petrol prices in Nigeria may be derailed because of the alleged sabotage by IOCs operating in the country. Although the IOCs have stoutly denied the allegation from the management of Dangote Refinery, such sabotage is common in business and should not be completely ruled out. Specifically, the Vice President of oil and gas at Dangote Refinery, Devakumar Edwin, had accused the IOCs of ‘deliberately and wilfully frustrating’ the refinery’s efforts to buy local crude by hiking the price above the prevailing market price.
The development has forced the refinery to import crude oil from the United States. Also, the management of the refinery alleged that the Nigerian Midstream and Domestic Petroleum Regulatory Authority (NMDPRA) had granted import licences indiscriminately to oil marketers to import dirty high sulphur diesel into the country. The NMDPRA had denied the weighty allegation that holders of its licence were importing substandard petroleum products. The Executive Director, Distribution System, Storage and Retailing Infrastructure, Ogbugo Ukoha, explained that the marketers could source diesel and petrol anywhere in the world.
The government and major stakeholders in the oil sector should dialogue on the raging matter. The claims and counter claims over alleged sabotage by IOCs and importation of dirty fuels do not bode well for the industry. No doubt, the non-supply of crude oil to the Dangote Refinery will frustrate the business and the survival of the company. Henceforth, the IOCs should work in concert with the local oil refineries to achieve government’s objectives.
The IOCs should not sabotage the local oil refineries or frustrate their survival. The IOCs should come clean and allay the fears that they are either deliberately asking for ridiculous premium charge or claiming that crude supply is not available just to create a monopoly in the market by raising fuel prices. The government must prevent any form of blackmail and victimisation. The allegation of ‘dirty fuel’ importation into the country should be thoroughly investigated, and the culprits severely punished.
About 18 months ago, the United States (US) and some European countries raised the alarm over the carcinogenic effect of the extra high sulphur diesel reportedly being dumped into the Nigerian market. As a result of the development, Belgium and the Netherlands imposed a ban on such fuel being exported from Nigeria into other West African countries. The NMDPRA should stop the indiscriminate issuance of import licences to marketers.
On no account should Nigeria be a dumping ground for imported dirty fuel. Government should increase efforts to make our refineries work efficiently and for new ones to be established. As an oil-producing country, Nigeria should not be importing refined petroleum products. Rather, it should be exporting them. In recent months, Dangote Refinery slashed diesel prices from N1,700/litre to N1,200/litre. That is a sign of good things to come when locally refined fuel enters the Nigerian market.
The lingering issue of crude oil supply contract and the alleged corruption should also be addressed quickly. The concerned parties should create conducive environment for business to thrive. Doing so will create the much-needed jobs and help in revamping the economy. Moreover, the government should take bold steps to protect local and foreign investments.
At the same time, the new local refineries should be protected from fierce competition, which may stifle them. They need some incentives to survive. The government should urgently provide the enablers that will make the country attractive to local and foreign investors. It is through such massive investments that the government can diversify the economy and boost the growth of the non-oil sector.