The Nigerian government authorities have offered the Chairman of Dangote Group, Aliko Dangote an olive branch amid the feud between Dangote Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority over substandard petroleum products.
This comes as Nigerian lawmakers, particularly, the Senate have vowed to come tough on economic saboteurs in the petroleum industry.
According to reports, on Monday night, the Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, Dangote, NMDPRA CEO, Farouk Ahmed and others met over the quality of the refinery’s petroleum products and domestic crude oil supply challenges.
Others in the meeting were Gbenga Komolafe, Chief Executive Officer, of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and Mele Kyari, Group Chief Executive Officer of Nigerian National Petroleum Corporation Limited (NNPC).
In a statement by the Minister’s media aide, Nneamaka Okafor, he said the meeting “marks a significant step towards resolving the challenges and underscores the Minister’s dedication to fostering a conducive environment for Nigeria’s oil and gas sector.
“The meeting focused on finding a sustainable and lasting solution to the current impasse affecting the Dangote Refinery, with all parties demonstrating a commitment to collaborative and proactive problem-solving”.
Similarly, in what seems like a feel-good day for the Dangote brand, the Senate and the House of Representatives also waded into resolving the challenges facing the refinery.
On his part, the Senate President, Godswill Akpabio on Monday decried economic sabotage bedeviling the country’s oil and gas sector.
He set up an ad-hoc committee to address the challenges facing Dangote Refinery and the oil and gas sector.
“The shadows of economic sabotage looms large, threatening to destabilize this critical industry by extension our Nation’s financial stability”, he said.
He charged the committee “to identify the perpetrators, their modus operandi and networks, then report same to the Nigerian senate for further legislative action”.
Earlier reported that the House Committee chairman of the joint Committee on Midstream and Downstream, Ikenga Imo Ugochinyere also asked Dangote Refinery and NMDPRA to halt allegations and counter allegations over the alleged substandard of products from the refinery.
According to him, the Committee has commenced an investigation into the issue of substandard petroleum products, non-availability of crude oil supply and other challenges Dangote Refinery was grappling with.
Though these moves might not have addressed entirely the petroleum industry crisis, they present a springboard for a more conversation towards ending the imbroglio facing Dangote Refinery and indeed Nigeria’s oil and gas sector.
Dangote Refinery, NMDPRA feud
The Dangote Refinery and NMDPRA dispute started in June 2024, when Devakumar Edwin, the Vice President of Dangote Industries Limited accused NMDPRA of granting indiscriminate licenses to oil marketers to import dirty fuel.
The feud heightened barely four days ago when the CEO of NMDPRA, Ahmed stated that the quality of the 650,000 barrel per day Lagos-based Dangote refinery’s diesel product is inferior compared to imported ones.
Ahmed said Dangote Refinery is “producing between 650 and 1,200 PPM. Therefore, in terms of quality, their products are inferior to imported ones”.
The statement sparked reactions among Nigerians and stakeholders in the country’s oil and gas sector.
Meanwhile, days after, Dangote dismissed Ahmed’s statement.
According to him, Dangote Refinery’s products are not substandard.
He called for an independent test of its products.
Reiterating Dangote’s stance, Rabiu Umar, the Group Chief Commercial Officer at Dangote Industries Limited, Rabiu Umar in a Channels Television interview on Monday said it was untrue that Dangote Refinery had high sulfur content.
Dangote Refinery and domestic crude supply crisis
The Dangote refinery had continued to lament its inability to get crude oil from Nigeria.
The refinery had sought crude oil supply from the United States and Brazil.
A recent statement by the firm indicated that it was also approaching Libya and Angola for crude oil import.
This comes amid moves by NUPRC to extract a commitment from stakeholders over meeting the Petroleum Industry Act Domestic Crude Supply Obligation, DCSO.
Consequently, NUPRC ordered refiners to provide monthly price quotes on crude supply.
This comes after Edwin had said that International Oil Companies were frustrating the 100 percent commencement of Dangote Refinery by selling crude oil at higher prices to the refinery.
Expert reactions
Speaking on Dangote Refinery and the challenges facing Nigeria’s energy sector, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf said government authorities in the industry should be more interested in scaling up domestic production rather than deepening the corruption-riddled importation of petroleum products.
He said that the government should provide support to all domestic refiners as a way of encouraging its own.
“What the economy needs at this time is production. This is true of all sectors of the Nigerian economy. But it is even more so for our energy sector.
“This is the pathway to energy independence, energy security, conservation of our foreign exchange, building our foreign reserves and deepening backward integration in the Nigerian economy.
“Domestic refining of petroleum products has incredible multiplier effects on the economy, in addition to promoting macroeconomic stability through reduction in import dependence.
“The government and its agencies therefore need to provide every support possible to support domestic refining of petroleum products.
“Importation of petroleum products currently accounts for about 30% of our import bill. Domestic refining of petroleum products would provide considerable relief to our forex market.
“The narrative about monopoly powers is better addressed by encouraging more domestic producers than perpetuating the culture of Importation.
“The economy had suffered enormous bleeding from the decades of Importation of petroleum products, the subsidy regime and the associated corruption in the entire supply chain. We cannot afford to continue on this path.
“Government agencies in the oil gas ecosystem should be more interested in scaling up domestic refining of petroleum products rather than deepening the corruption stricken Importation of petroleum products”, he said.
Similarly, an energy expert, Joseph Eleojo said the government should do everything to fight those sabotaging Dangote Refinery.
However, Managing Partner, BBH Consulting and Convener, Public Interest Advocacy Network (PIAN), Barr. Ameh Madaki believes that the government should uphold regulatory sanctions on Dangote Refinery to checkmate anti-competition tendencies in the oil industry.
He noted that if Dangote Refinery must succeed in the oil sector, it must wean itself off the ‘feeding bottle syndrome’.
“I think that the Regulators should clamp down firmly on Dangote’s allegations that the NMDPRA is authorizing the importation of substandard products into Nigeria.
“That is a direct affront to the regulator, to which Dangote Refinery is subject. Dangote’s utterances are totally anti-competition, and unless he weans himself off the feeding bottle syndrome, he will never be able to play on a level playing field”, he said.
