The Federal Government has requested a comprehensive diesel report from Dangote Refinery and has ordered a new round of testing to ensure the quality and safety of the diesel produced by the refinery.
Meanwhile the Vice President of Oil and Gas at Dangote
Industries Limited, Devakumar Edwin noted that the refinery has exported over
3.5 billion liters of diesel and aviation fuel to Europe in recent months. This
exported fuel accounted for approximately 90% of the refinery’s total
production.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is awaiting further reports to ascertain the actual sulfur content of diesel produced by the Dangote refinery. The company has refuted allegations of substandard fuel production.
NMDPRA spokesperson George Ene-Ita stated in an interview
that the agency has fulfilled its responsibilities and will not engage in a
media dispute regarding the claims made by NMDPRA Chief Executive Farouk Ahmed,
who asserted that Dangote’s diesel has a higher sulfur content than imported
diesel.
Ene-Ita stated that there are approximately 15 engineers and
scientists from the organization presently stationed at the Dangote refinery.
The latest information regarding the refinery's sulfur content is anticipated
to be released today, specifically on Monday.
Ahmed had earlier asserts that the diesel manufactured at
the Dangote refinery is high in sulfur content.
In response to Dangote’s claims that the NMDPRA was granting
licenses to certain traders to import substandard fuel into Nigeria last week,
Ahmed asserted that it was actually Dangote’s fuel that exhibited higher
sulphur content.
Furthermore, he highlighted that the refinery, which has
been distributing diesel and aviation fuel within Nigeria for several months,
has yet to obtain the necessary license and is currently in the
pre-commissioning phase.
“The claim by some media houses that there were steps to
scuttle the Dangote refinery is not so. The Dangote refinery is still in the
pre-commissioning stage. It has not been licensed yet; we haven’t licensed them
yet. They are still in the pre-commissioning. I think they have about 45 per
cent completion,” Ahmed declared.
The NMDPRA boss warned that Nigeria could not rely heavily
on the Dangote refinery for its fuel supply.
According to him, the refinery had requested the regulator
to stop giving import licences to other marketers so as to be the only fuel
supplier in Nigeria.
“We cannot rely heavily on one refinery to feed the nation,
because Dangote is requesting that we should suspend or stop importation of all
petroleum products, especially AGO and direct all marketers to the refinery,
that is not good for the nation in terms of energy security. And that is not good for the market, because
of monopoly,” he stressed.
Speaking about quality, he said, “So, in terms of quality,
currently the AGO quality in terms of sulphur is the lowest as far as the West
African requirement of 50 ppm is concerned.
“Dangote refinery and some modular refineries, like
Waltersmith refinery and Aradel refinery, they are producing between 650 to
1,200ppm. So, in terms of quality, their product is much more inferior to the
imported quality,” he alleged.
Reacting during a tour of the refinery by members of the
House of Representatives led by the Speaker, Hon. Tajudeen Abbas, over the
weekend, Dangote asserted that products refined at the world’s largest single
train refinery are of superior quality compared to the imported fuel.
The speaker and other members had observed the testing of
Automotive Gas Oil from two petrol stations alongside the same taken from the
Dangote refinery.
The diesel samples were procured from two well-known filling
stations near Eleko junction along the Lekki-Epe Expressway, Lagos, by the
lawmakers.
The Chairman of the House Committee on Downstream,
Ikeagwunon Ugochinyere, and Chairman of the House Committee on Midstream,
Okojie Odianosen, oversaw the collection of samples from the Mild Hydro
Cracking unit of the Dangote refinery for testing of all the samples.
The Dangote laboratory tests were said to have revealed that
Dangote’s diesel had a sulphur content of 87.6 ppm while the other two samples
showed sulphur levels exceeding 1,800 ppm and 2,000 ppm respectively.
Dangote faults NMDPRA
Dangote highlighted that the research results have
effectively refuted the claims made by Mr. Ahmed regarding the superiority of
imported diesel over domestically refined products.
With utmost confidence, the Africa’s wealthiest man openly
challenged the regulatory authority to conduct a comparative analysis of the
quality standards between refined products from his refinery and those imported
from external sources. He strongly advocated for an impartial evaluation
process to ascertain which option best serves the interests and welfare of the
Nigerian populace.
“We produce the best diesel in Nigeria. It is disheartening
that instead of safeguarding the market, the regulator is undermining it. Our
doors are open for the regulator to conduct tests on our products anytime;
transparency is paramount to us. It would be beneficial for the regulator to
showcase its laboratory to the world so Nigerians can compare. Our interest is
Nigeria first because if Nigeria doesn’t grow, we have limited capacity for
growth.
Dangote expressed concerns regarding the imported products
being promoted by Ahmed, citing their failure in quality tests. He alleged that
many importers possess counterfeit certificates, as the laboratory owners have
been instructed to provide favorable results.
On the allegation of monopoly, Dangote said, “If you are
saying how can Dangote alone supply the market, are you saying the N4bn that
the NNPC spent now on the activation of their refineries in Kaduna, Warri and
Port Harcourt is down the drain? Are the refineries not going to work? They
have announced a date. If they are there, we cannot be a monopoly because we
are not the only one; actually, they are more powerful than us. So, there is no
way we can be a monopoly, it is not done.”
With regard to the sulfur content, he further stated, “I am
surprised for somebody to come and mention that we have a bad quality; we and
other modular refineries. I can’t talk of the quality of the modular
refineries, but our own today is 87ppm and by Monday, we will be at 50ppm, by
the beginning of August, we will be at 10ppm.
“All the test certificates people are busy flaunting around
today are fake. Where are the laboratories? We have the laboratory.
“The demarketing of a company by a regulator that he is
supposed to protect is very very unfortunate. We produce the best diesel in
Nigeria and if the regulator wants, he can come any time to conduct a test. I
would like the media to show our lab and I would like the regulator himself to
show us which lab is he using. As a
regulator, he is supposed to have a lab. If the regulator doesn’t have a lab,
then we have an issue because he cannot rely on somebody. He is supposed to
check us.”
In response to the assertion that Dangote’s diesel has a
sulfur content of 87 parts per million, the NMDPRA representative suggested
that circumstances may have changed significantly over the course of five days.
“We are not fighting anybody. Dangote refinery is the same
as an indigenous local refinery. We are regulators, we don’t fight in the
media. We have done our job, and that is it.
“You know we are dealing with engineering and time, and when
we deal with engineering and time, it means that whatever claims put forward
can be put to test and verified or debunked. If you recall, the ACE made that
pronouncement on the sideline of an interaction on Wednesday or so. Between
that time and now, it’s been like five days, a lot can change. So, 650ppm or
500 can come down to whatever.
“What I am saying is that I can’t give you any verifiable
result for now, being a Sunday evening, until perhaps tomorrow when we will be
in a position to review our technical report that must have been submitted by
our engineers who are embedded in that plant. What normally comes to us are
weekly reports. These particular tasks are done across the week from Monday to
Sunday; even now, operations are going on and our engineers are there. So, I
can’t speak to the claims made by that refinery now,” Ene-Ita explained.
On the insinuation that ACE may be relying on a report from
other laboratories to describe his fuel as inferior, he replied, “Of course we
have laboratories all over the country. Does Dangote work in NMDPRA? He doesn’t
work in NMDPRA.”
The NMDPRA representative expressed strong disapproval of
the accusation that the regulatory body was engaging in detrimental actions
against a company it is tasked to protect. They questioned whether Dangote was
attempting to influence the agency to alter its regulations in his favor.
“Why should we protect any company? We are regulators,
operations are going don’t protect anybody; we regulate operators. If he says
protect, it means we are shielding. It means that we should bend the rules. We
don’t do that, we regulate every company.
“And we don’t demarket, what does he mean? You only demarket
your competitors to gain an advantage. We are not competing with an operator.
The word, ‘demarketing’, is only used when two competing brands are fighting.
We are not an operator; we are a regulator. How can we demarket? Please, I take
exception to that, on behalf of my organisation. We are not demarketing
anybody. We are regulating every local refinery, including NNPC,” he clarified.
Upon hearing the suggestion that the business mogul may have
been referring to the need for the regulator to increase local refining
capacity, he responded, “That’s what we are doing. As we speak, there are over
15 engineers and scientists of the NMDPRA working with them for the last how
many months. That’s how we get our reports. We have engineers and scientists
there, who go there. That’s how we get them. That is why I keep on saying we
don’t want to personalise this matter. We are working to see that the local
refining capacity is booted to a point where we are self-sufficient in
producing our fuel here.”
Dangote engages in the importation of crude oil
In the meantime, the Dangote refinery is currently in
negotiations with Libya to secure crude oil for its 650,000 barrels per day
plant. Additionally, the refinery will also seek Angolan oil, as confirmed by a
senior executive, Devakumar Edwin, to Reuters. These actions are being taken to
address challenges related to domestic crude supplies.
Since Dangote commenced operations in January, it has
encountered challenges in securing sufficient crude supplies within Nigeria.
Despite being Africa’s largest oil producer, Nigeria is grappling with issues
of theft, pipeline vandalism, and inadequate investment.
As a result, Dangote has had to resort to importing crude
from distant locations such as Brazil and the United States.
“We are talking to Libya about importing crude,” Edwin told
Reuters late on Saturday. “We will talk to Angola as well and some other
countries in Africa.”
He chose not to provide specific information about the
discussions but mentioned that international traders and oil companies are
prominent purchasers of Dangote’s gasoil, a significant portion of which is
exported.
“The biggest off-takers are the two big traders Trafigura
and Vitol and BP and, to some extent, even TotalEnergies. But all of them are
saying they are taking it to offshore,” Edwin said.
Data analysis of traders and shipping indicates that Dangote
is expanding its gasoil exports to West Africa, capturing market share from
European refineries.
Dangote has announced the commencement of Premium Motor
Spirit sales in August, aiming to eliminate refined fuel imports into Nigeria.
Marketers expressed concerns
Nevertheless, Nigerian stakeholders and industry
participants have been voicing their apprehensions regarding the current
controversies, particularly in light of the regulator’s announcement that the
nation will persist in importing refined petroleum products.
It Is pertinent to recall that the Vice President of Oil and
Gas at Dangote Industries Limited, Devakumar Edwin, while alleging that International Oil
Companies (IOCs) are attempting to impede the refinery's progress, also accused
the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)
of indiscriminately granting licenses to marketers for the importation of
substandard refined products into the country.
According to Edwin,
the Federal Government of Nigeria granted 25 licenses for the establishment of
refineries within the country. However, only the Dangote Group has successfully
fulfilled its commitment in this regard.
The Vice President highlighted that the refinery has
exported over 3.5 billion liters of diesel and aviation fuel to Europe in
recent months. This exported fuel accounted for approximately 90% of the
refinery’s total production.
“The Federal Government issued 25 licences to build
refineries and we are the only one that delivered on our promise. In effect, we
deserve every support from the government. It is good to note that from the
start of production, more than 3.5 billion litres, which represents 90 per cent
of our production, have been exported. We are calling on the Federal Government
and regulators to give us the necessary support to create jobs and prosperity
for the nation,” Edwin stated.
It was alleged that even though Dangote was producing and
bringing diesel into the market, complying with the regulations of the Economic
Community of West African States, “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.”
Edwin lamented, “The decision of the Nigerian Midstream and
Downstream Petroleum Regulatory Authority in granting licenses indiscriminately
for the importation of dirty diesel and aviation fuel has made the Dangote
refinery expand into foreign markets. 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 noted that the refinery adheres to the highest
international standards and complies with rigorous guidelines and regulations
to safeguard the local environment. As a result, we have successfully exported
our products to Europe and various other regions worldwide.
“It is regrettable that in Nigeria, import licences are
granted despite knowing that we can produce nearly double the amount of
products needed in Nigeria and even export the surplus. Since January 2021,
ECOWAS regulations have prohibited the import of highly contaminated diesel
into the region,” Edwin stated.
In light of recent statements made by the NMDPRA chief
executive regarding the quality of locally refined fuels, a number of Nigerian
citizens have taken to online platforms to express their concerns and call for
the removal of the individual from their position. Additionally, the House of
Representatives has indicated that an investigation into the matter will be
conducted.