The unending rift between Dangote refinery and the Nigerian National Petroleum Company Ltd (NNPCL) and the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) is not good for the oil sector. The disquiet among the feuding parties will likely discourage local and international investors in the oil and gas industry.
The NMDPRA had levelled weighty allegations against the refinery largely owned by Aliko Dangote. Apart from alleging that Dangote’s fuel has high sulphur levels, the NMDPRA boss, Ahmed Farouk, claimed that Dangote refinery has not been granted full license to operate. While dismissing the allegations, Dangote insisted that the refinery’s petroleum products were of high quality than imported ones.
He also told members of the House of Representatives Committee on oil and gas who visited the plant that there were moves to sabotage the refinery. He alleged that some officials of NNPCL have blending plants in Malta. The NNPCL boss, Mele Kyari, equally denied the allegation. In a bid to settle the rift, the Minister of State for Petroleum Resources, Heineken Lokpobiri, held a meeting with representatives of the feuding parties and the Nigerian Upstream Petroleum Regulator Commission (NUPRC) in Abuja.
The Senate recently set up an ad hoc committee to investigate the matter. These are commendable efforts that will hopefully resolve the lingering issues. These interventions notwithstanding, we call for an independent panel to thoroughly investigate the matter and settle the rift. The peaceful resolution of the matter is in the best interest of the oil sector.
Let the government ensure transparency and accountability in the oil sector. The opaque nature of the sector has tacitly encouraged the endemic financial malfeasance in the system. At the same time, the extant template of domestic crude oil supply as stipulated in section 109(2) of the Petroleum Industry Act (PIA) 2021 should be observed.
Government must vet all petroleum products imported into the country. We say this considering the health and environmental hazards of contaminated fuel. Any marketer found to be importing dirty fuel should be dealt with. Some months ago, the United States (US) and some European countries raised the alarm about the carcinogenic effect of the unsafe high sulphur diesel allegedly being dumped into the Nigerian market.
Following the development, Belgium and the Netherlands imposed a ban on such fuel being exported from Nigeria, into other West African countries. Therefore, we urge the NMDPRA to be circumspect in issuing import licences to oil marketers. Doing so will prevent the Nigerian market from being flooded with dirty fuel. The present administration should protect local investors by giving them some incentives. They should not be scared away with bad policies. Any threat to the oil industry will ruin the economy.
Unarguably, the sector provides about 70 per cent of government’s revenue. There is need to encourage local participation in the oil sector as it is done in Europe and America. Nigeria cannot build a virile economy when investors in the sector are allegedly being frustrated by government’s hostile policies. The undue politicisation of the oil sector will not augur well for the economy.
It is sad that the nation’s four refineries are not working despite billions of naira spent on annual turn around maintenance. Some individuals with licences to build new refineries are afraid to come on stream. Depending so much on imported petroleum products as the NNPCL and other stakeholders are doing will stunt the growth of the oil sector and by extension Nigeria’s economy.
Although the new NNPCL was fashioned after Saudi Arabia’s oil behemoth, Aramco, it is yet to live up to that expectation in terms of independence and profit-making. It has not built refineries to ensure that Nigeria has enough petroleum products for domestic consumption and for export to African and global markets.
For the NNPCL to be like Aramco, it must be willing to embrace far-reaching reforms in line with global best practices. The government should muster the political will to end the era of importation of refined petroleum products. Let the government encourage Nigerians to invest in local refineries. If the four refineries are not working effectively, the government can either sell them or repair them. Nigeria should have a realistic deadline for ending importation of refined petroleum products.