HomeFeaturesDangote Refinery Says IOCs Engaging In Sabotage Efforts

Dangote Refinery Says IOCs Engaging In Sabotage Efforts

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Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, has publicly accused international oil companies in Nigeria of engaging in a concerted effort to cripple his company’s operations, raising questions about the industry’s competitiveness.

According to Edwin, the refinery is being forced to import crude oil from countries as far away as the United States, at a substantial additional cost, due to the exorbitant prices being charged by international oil companies for local crude, which he claims is a deliberate attempt to stifle the refinery’s efforts to source oil domestically.

At a Lagos training program for journalists, Edwin lamented that the NMDPRA’s decision to grant licenses for the importation of low-quality refined products has created an environment where substandard fuels are able to enter the market, hindering progress in the industry.

He said: “The Federal Government issued 25 licences to build refineries and we are the only one that delivered on 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.”

According to him, “While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude. 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.

“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports Crude Oil and imports refined Petroleum Products. They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries, adding to their GDP, and dumping the expensive refined products into Nigeria – thus making us to be dependent on imported products.

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“It is the same strategy the multinationals have been adopting in every commodity, making Nigeria and Sub-Saharan Africa to be facing unemployment and poverty, while they create wealth for themselves at our expense. This is exploitation – pure and simple. Unfortunately, the country is also playing into their hands by continuing to issue import licences, at the expense of our economy and at the cost of the health of the Nigerians who are exposed to carcinogenic products.

“Even though we are producing and bringing out diesel into the market, complying with ECOWAS regulations and standards, 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.

“Since the US, EU and UK imposed a Price Cap Scheme from 5th February 2023 on Russian Petroleum Products, a large number of vessels are waiting near Togo with Russian ultra-high sulphur diesel and, they are being purchased and dumped into the Nigerian Market.

“Some of the European countries were so alarmed about the carcinogenic effect of the extra high sulphur diesel being dumped into the Nigerian Market that countries like Belgium and the Netherlands imposed a ban on such fuel being exported from its country, into West Africa, recently. Sadly, 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.”

As part of efforts to improve fuel standards in West Africa, Belgium and the Netherlands introduced new regulations in May, mirroring EU guidelines and effectively prohibiting the export of cheap, low-grade fuels to the region.

The new regulations harmonize fuel export standards with those of the European domestic market, specifically focusing on diesel and petrol with high sulphur and chemical content. Previously, these fuels, containing up to 10,000 parts per million (ppm) of sulphur, were exported to countries like Nigeria and other West African nations at discounted rates.

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