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Last Sunday, Nigerians received in shock the startling
revelations by the Dangote Industries Limited that the international oil
companies (IOCs) operating in Nigeria were doing everything to frustrate its
650,000 barrels per day refinery by not giving it crude produced in the country
to run the plant.
The Aliko Dangote-owned group also alleged that the
downstream regulator -the Nigerian Midstream and Downstream Petroleum
Regulatory Authority (NMDPRA), was still granting import licences,
indiscriminately, to marketers to import dirty refined products into the
country (even when the refinery produces large volume of high quality products
to meet local demand).
It added that the federal government issued 25 licences to
investors to build refineries, but Dangote Refinery was the only one that
delivered on its promise.
At a time Nigeria is witnessing an exodus of foreign
companies from the shores of the country with huge adverse socio-economic
impact on the nation, it is expected that the federal government should do
everything within its powers to protect investment of Nigerians in the country
such as Dangote Refinery, owing to its immense benefits to the nation.
To many Nigerians, it is highly inconceivable that a
refinery owned by a Nigerian, established in the country, cannot get crude oil
produced in Nigerian soil to run its refinery and produce petroleum products
for the country.
However, owing to the game-changing impact of the Dangote
Refinery to the nation’s socio-economic and industrial development, the actions
of the IOCs, the oil marketers and the NMDPRA have attracted responses from
concerned citizens who have called on the government to do everything within
its powers to protect the refinery from the plots of the saboteurs. In their
interventions, civil society organisations, Nigerian students and social media
users, analysts and local crude oil refiners have jointly risen in defence of
Dangote Refinery, urging the federal government to protect the refinery against
any form of sabotage.
The Dangote Refinery owned by Africa’s richest person,
Dangote has been in operation since January this year, producing high quality
diesel, aviation fuel and naphtha, with the Nigerian market now enjoying the
benefit of in-country production of petroleum products from the refinery.
The plant has the capacity to meet 100 per cent of the
Nigerian consumption need of all refined products (including petrol 53 million litres per day; diesel, 34 million
litres per day; kerosene, 10 million litres per day, and aviation jet, two
million litres per day) and has a surplus of each of the products for export,
thus ending Nigeria’s dependence on imported petroleum products.
The Sabotage
The Vice President, Oil and Gas at Dangote Industries
Limited (DIL), Devakumar Edwin recently accused IOCs in Nigeria of doing
everything to frustrate the survival of Dangote Oil Refinery and
Petrochemicals.
A statement by the Dangote Group last Sunday, quoted Edwin
to have made the allegations during a one-day training programme for energy
editors, organised by the company. He specifically said the IOCs were
deliberately and willfully frustrating the refinery’s efforts to buy local
crude by jerking up high premium price above the market price, thereby forcing
it to import crude from countries as far as United States, with its attendant
high costs.
According to him, “While the Nigerian Upstream Petroleum
Regulatory Commission (NUPRC) are trying their best to allocate the crude for
us, the IOCs are deliberately and willfully frustrating our efforts to buy the
local crude.”
He added, “It would be recalled that the NUPRC, recently met
with crude oil producers as well as refineries owners in Nigeria, in a bid to
ensure full adherence to Domestic Crude Oil Supply Obligations (DCSO), as
enunciated under section 109(2) of the Petroleum Industry Act (PIA).
“It seems that the IOCs’ objective is to ensure that our
Petroleum Refinery fails. It is either they are deliberately asking for
ridiculous/humongous premium or, they simply state that crude is not available.
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 also lamented that the Nigerian Midstream and Downstream
Petroleum Regulatory Authority (NMDPRA) was still granting import licences,
indiscriminately, to marketers to import dirty refined products into the
country.
Edwin disclosed that the federal government issued 25
licences to investors to build refineries, but Dangote Refinery was the only
one that delivered on its promise.
He said the Dangote group deserved every support from the
Nigerian government, especially with the Domestic Crude Supply Obligation
(DCSO), as specified in the enabling law.
Edwin pointed out, “It is good to note that from the start
of production, more than 3.5 billion litres, which represent 90 per cent of our
production, has been exported.
“We are calling on the federal government and regulators to
give us the necessary support in order to create jobs and prosperity for the
nation.” He added, “It is sad that the country is giving import licences for
such dirty diesel to be imported into Nigeria, when we have more than adequate
petroleum refining capacity locally.”
The company said the decision of the NMDPRA to keep granting
licences indiscriminately for the importation of dirty diesel and aviation
fuel, had made the refinery to expand
into foreign markets. Edwin added, “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 stated that because the refinery met the international
standard and complied with stringent guidelines and regulations to protect the
local environment, it had been able to export its products to Europe and other
parts of the world.
He appealed to the federal government and the National
Assembly to urgently intervene for speedy implementation of the PIA and to
ensure the interest of Nigeria and Nigerians were protected.
Nigerians Seek FG’s Action
Following the revelation by the Dangote Group on its
frustration in accessing crude oil in-country, Nigerians in the civil society
space and on social media rose in defence of the refinery, calling out IOCs for
sabotaging the operations of the multi-billion dollar facility by not selling
crude produced in Nigeria to it.
The Netizens voiced their displeasure over the efforts of
the IOCs and local oil marketers to frustrate the refinery, stating that the
federal government must protect the Dangote refinery against any form of
sabotage. Coordinator of a civil society group, known as Initiative for Defence
of Democracy and Justice, Alhaji Aliyu Kaoje, who spoke to told journalists,
warned, “Let us sound a strong warning to them to desist forthwith whatever
they are doing directly or indirectly to frustrate the operations of the
refinery.”
Speaking on Arise News Channel, the Chief Executive Officer,
ThinkBusiness Africa, Dr. Ogho Okiti, stressed that, “If there is a kind of
saboteur anywhere, the federal government should do all to contain it. This
refinery is not just for the interest of Aliko Dangote, it should not be seen
as a Dangote problem, but a national problem because this is a national asset.
This asset is part of the solution to our energy crisis in Nigeria.”
In his intervention, financial planning expert, Kalu Aja,
posited, “If Dangote needs crude, Nigerian National Petroleum Company (NNPC)
should support its 20 per cent investment by giving Dangote its oil equity.”
The Publisher of Sweet Crude Reports, Mr. Hector Igbikiowubo, asked, “How come the NNPC
isn’t allotting all of its 445,000 barrels per day (crude meant for its four
refineries) to the Dangote Refinery for refining?”
An X user, with the handle, AgriGATE Nigeria, tweeted that
“If @DangoteGroup @AlikoDangote refinery fail, then @NigeriaGov can be said to
be complicit in conspiracy against the refinery. American government goes extra
length to protect interest of American companies. Ours can’t be left at mercy
of international oil companies.”
Another X user, Eguando, appealed to President Bola Tinubu
to protect and liberate the economy by making the Dangote Refinery work, adding
that the refinery needs all the supports it requires to succeed.
“They the IOCs have enjoyed exporting our Crude oil the last
60 years or more without building one refinery each or collectively building
one for us as a country to reap the benefit, yet one Nigerian has taken the
initiative and they want to do everything to derail it.”
Another user, Ayodeji Oluwadamilare added that “I am not
even surprised there are people who want that refinery to fail. They enjoy the
status quo of subsidy and don’t want it to end… Wicked humans… They will be
shamed at last…”Also, Shimsun, another X user, tweeted, “The IOCs must be
brought to heel and the corrupt civil servants at NMDPRA who are bent on
keeping the system poisonously inefficient should be made to answer for their
actions.”
On his part, Oseni Lanre stated that “The refinery has to
work and it must now!”
Local Oil Refiners Back Dangote
Also worried by the actions of the IOCs and indigenous
producers against the Dangote Refinery, Local crude oil refiners under the
umbrella of the Crude Oil Refineries Association of Nigeria (CORAN) threw their
weight behind the refining company. The association stressed that the consumers
can only purchase petroleum products if refineries in the country are made to
function.
Speaking on a national television, Chairman of CORAN, Mr.
Momoh Oyarekhua, corroborated claims by Dangote Refinery that some IOCs were
actively obstructing the refinery’s operations by refusing to guarantee and
provide crude supply. Oyarekhua said, “I will take it from the angle of
producers of crude rather than focusing on the IOCs alone. What we usually call IOCs are the
international producers, but I do not think it is just about the international
producers and operators in Nigeria, I think it’s more about the producers of
crude in Nigeria that are perhaps frustrating the refineries in Nigeria from
getting crude.
“In fact, we have been on this journey, I particularly have
been on this journey of advocating for crude sales to local refineries and also
where necessary for the modular refineries for crude to be sold to them in
naira because most of our products are produced into the local market and
income is actually in Naira and it is just commonsensical that if you sell
product in naira you should be able to get your feedstock in naira, mostly when
that feedstock is produced in naira so that you don’t put pressure on the US
dollar that is already scarce in the country.
“We have had several engagements with the NUPRC and all of
that and it is clear that in the PIA Law, in section 109, there is DCSO which
is supposed to be Domestic Crude Supply Obligation to support the local
refineries and I think that law was specifically put there by legislators not
to starve the refineries. But what we have seen is a huge and still resistance
by the producers of crude in Nigeria. They will rather prefer to export crude
abroad than to sell to local refineries.”
He insisted that the cost of finished products would reduce
drastically if local refining is encouraged, instead of the importation of
finished refined products that do not even meet quality standards
“We all saw that when Dangote came on stream, diesel dropped
from N1,600 to about N1,200, and as we speak today, from our refineries, we are
even selling less than N1,100. This is to tell you how far producing crude
locally can support the economy and can support the people of Nigeria,”
Oyarekhua said.