The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed, revealed in an interview in Abuja that the Dangote refinery has not been licensed to operate in Nigeria. He stated that the refinery is still in its pre-commissioning stage, with only 45% of the work completed.
Allegations of Crude Oil Supply Issues
Farouk Ahmed addressed the allegations made by Dangote Refinery that its operations are being hindered due to a lack of crude oil supply from International Oil Companies (IOCs). He clarified that these allegations are unfounded. Specifically, Ahmed contradicted the statements made by the Chief Executive of the Refinery, Alhaji Aliko Dangote, who claimed that the refinery was ready for operation. Ahmed emphasized that the refinery is only about 45% complete.
Response from Dangote Industries Limited
Devakumar Edwin, the Vice President of Oil and Gas at Dangote Industries Limited, had accused IOCs of refusing to sell crude oil to the refinery. Edwin claimed that the company buys crude from IOCs at $6 above the market price. He suggested that the IOCs’ objective is to ensure the refinery’s failure by either demanding an excessive premium or stating that crude oil is not available.
Concerns Over Monopolistic Practices
Farouk Ahmed also criticized the refinery’s demand that regulators suspend or stop all importation of petroleum products, especially AGO and Jet Kero, directing all marketers to the refinery. He argued that such a demand would lead to a monopoly, which would not be favorable for the country’s energy sector.
Quality Issues
Ahmed further condemned the quality of the products produced by the refinery, stating that they are inferior. He noted that the AGO produced by Dangote Refinery has a sulfur content of 650 to 1,200 ppm, which is significantly higher than the West African requirement of 50 ppm. This, he argued, is detrimental to the nation’s energy security and market quality.
Bottom Line
The Dangote refinery, still in its pre-commissioning stage, is yet to receive an operational license from the NMDPRA. Allegations of obstruction by IOCs have been refuted by the regulatory authority.
Additionally, concerns over potential monopolistic practices and inferior product quality have been raised, casting doubts on the refinery’s readiness and impact on Nigeria’s energy sector.
