July 13, 2024

Dangote, DAPPMAN in war of words over dirty refined products

0

Ilenre Irele

Between Dangote Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), all seems not to be well.

That the centre could not hold between the duo was evident in the outburst of the Vice President, Oil and Gas of Dangote Industries Limited (DIL), Devakumar Edwin, who accused International Oil Companies (IOCs) in Nigeria, of doing everything to frustrate the survival of Dangote Oil Refinery and Petrochemicals.

Edwin stated this while speaking to a group of Energy Editors at a one-day training programme, organised by the Dangote Group.

He said the IOCs were deliberately and wilfully 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 the United States, with its attendant high costs.

He also criticised activity of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), for granting licences, indiscriminately to marketers to import dirty refined products into the country.

He said, “The Federal Government issued 25 licences to build refinery 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 in order to create jobs and prosperity for the nation.”

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”.

Recal 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 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 dependent on imported products. It is the same strategy the multinationals have been adopting in every commodity, causing Nigeria and Sub-Saharan Africa to face 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.

“In spite of the fact that 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 on 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.

“In fact, 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. 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.” Mr. Edwin of Dangote Industries said.

But reacting to Edwin’s submission, the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) stated that none of its members imports dirty fuel.

DAPPMAN stated that Edwin’s statement is laced with Inaccuracies,

The association spoke in response to the allegation by Dangote Refinery alleging attempt to frustrate its refinery by the NMDPRA

DAPPMAN in a statement said “no member of the association and indeed, no private fuels depot has imported into the country any fuel with specification that is outside of the regulation other than what is currently approved by the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA).”

It stated that the information from the Dangote Refinery Management “is laced with inaccuracies”.

The statement read: “DAPPMAN noted that the downstream regulatory authority, (NMDPRA), in the very recent past had initially objected to offtakes by our daughter vessels from import mother vessels, via Ship-to-ship operations which usually take place offshore Lome, a move which was vehemently protested and resisted by downstream operators and has been rescinded.

“DAPPMAN recalls that between February and May 2024, the NMDPRA had allowed AGO imports with maximum sulphurcontent of 200/ppm however this was followed by another move, by the regulator, to fast forward the country target date of the implementation of the 50/ppm sulphur limitation on PMS and AGO imports, from 31st December 2024 to 1st June 2024, thereby limiting all marketers and depots’ AGO source to Dangote Refinery even though the latter was yet to install its desulphurization equipment as the sulphur in its blends of AGO presently exceed 50/ppm.

“This again was resisted by DAPPMAN in its letter to the NMDPRA which was dated 10th June 2024 to warn and alert the regulator not to ‘inadvertently promote and introduce a monopoly into the sector.

“With stiff resistance at every attempt at introducing a Dangote Refinery monopoly into the downstream, and the fact that the latter, despite its most recent production of AGO with sulphurcontents reported at 1200/ppm, it is baffling to us that the Management of Dangote Industries (including the Dangote Refinery), who are very much aware of these facts, could claim that the NMDPRA has been granting licenses indiscriminately to marketers to import ‘dirty refined products’ into the country.”

According to it, Dangote Refinery as a business entity “is free to adopt any model that suits its management however its current practice of cheaper bulk sales prices to international buyers at the detriment of Nigerian buyers calls to question their patriotism to the country.”

“There is no doubt that the success of Dangote Refinery will be a thing of pride to the nation, but all downstream operators and their activities must be in tandem with the provisions of the Petroleum Industry Act 2021 which abhors ‘monopoly’ of any sort.

“DAPPMAN will continue to work with all stakeholders, including Dangote Refinery willingly to provide safe, healthy fuels to all Nigerians competitively giving them great and affordable fueling options for their daily activities.”

Advertisements
ads_img

Leave a Reply

Your email address will not be published. Required fields are marked *