Friday, July 19, 2024

Dangote Refinery Accuses International Oil Companies and NMDPRA of Sabotage

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In a striking accusation, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), has alleged that International Oil Companies (IOCs) in Nigeria are actively undermining the success of the Dangote Oil Refinery and Petrochemicals. According to Edwin, these companies are manipulating the market to hinder the refinery’s ability to procure local crude oil, forcing it to source crude from distant locations like the United States, which incurs significantly higher costs.

During a training session organized by the Dangote Group for energy editors, Edwin highlighted the troubling role of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). He claimed the authority is recklessly granting licenses for the importation of substandard refined products into Nigeria. Edwin emphasized that Dangote Refinery is the only one out of the 25 licensed entities to have fulfilled its promise, and hence deserves unwavering support from the government. He pointed out that since the refinery commenced operations, it has exported more than 3.5 billion liters of refined products, equivalent to 90% of its output, underscoring its potential to create jobs and spur economic growth if adequately supported.

Elaborating on the challenges, Edwin mentioned, “While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is making efforts to allocate crude oil to us, the IOCs are purposefully obstructing our ability to purchase local crude. This obstruction includes demanding exorbitant premiums or claiming unavailability of crude. At one point, we were compelled to pay $6 above the market price, leading to reduced output and the necessity to import crude from as far as the US, thus inflating our production costs.”

Edwin contended that the actions of the IOCs seem designed to ensure Nigeria remains a nation dependent on exporting crude oil and importing refined products. He stated, “Their goal appears to be keeping Nigeria in a cycle of exporting raw materials while importing expensive refined products. This approach enriches their home countries at the expense of Nigerian economic growth, employment, and wealth creation.”

He further criticized the multinational companies for a strategy that perpetuates unemployment and poverty in Nigeria and Sub-Saharan Africa while generating wealth for themselves. Edwin described this as blatant exploitation, facilitated by the Nigerian government’s continued issuance of import licenses for subpar fuels, which pose significant health risks due to their carcinogenic properties.

Despite the refinery’s compliance with ECOWAS regulations and standards, Edwin noted that the NMDPRA continues to issue licenses for the importation of high-sulfur diesel, primarily from Russia, which is banned in Europe due to its detrimental health effects. He revealed that European nations like Belgium and the Netherlands have recently tightened their standards to prevent the export of such fuels to West Africa, in response to the alarming levels of pollution and health hazards they pose.

Belgium’s Minister of Environment, Zakia Khattabi, declared that her country, following the Netherlands, has prohibited the export of low-quality petrol and diesel to West Africa, emphasizing that this decision was made to prevent the export of toxic fuels that degrade air quality and pose cancer risks.

Public Eye, an international organization, had exposed in 2017 how large-scale exports of polluted fuels from European ports to African markets were causing severe environmental and health issues. This led to calls for stringent enforcement of regulations to protect millions of Africans from these harmful imports.

Edwin stressed that the indiscriminate licensing by the NMDPRA has compelled Dangote Refinery to expand its market reach to foreign countries. He proudly noted that the refinery has recently exported diesel and aviation fuel to Europe, adhering to international standards and guidelines, which has allowed it to compete globally.

Appealing to the Federal Government and the National Assembly, Edwin urged for urgent implementation of the Petroleum Industry Act (PIA) to protect Nigeria’s interests. He referenced Ghana’s recent legislative ban on importing highly contaminated fuels, contrasting it with Nigeria’s continued issuance of import licenses despite having sufficient local production capacity. He reminded that since January 2021, ECOWAS regulations have prohibited the import of highly contaminated diesel into the region, urging Nigeria to align with these standards to ensure public health and economic prosperity.

In expanding these allegations, Edwin paints a picture of a sector rife with challenges and adversities. The refinery, envisioned as a beacon of progress, faces a concerted effort to curtail its potential. The IOCs, accused of manipulation, create an environment where Dangote’s efforts are undermined, leading to unnecessary economic strain and higher operational costs. This strategy not only affects the refinery’s profitability but also has broader implications for the Nigerian economy, potentially stalling job creation and industrial growth that the refinery promises.

The importation of substandard fuels, a significant point in Edwin’s address, highlights a public health crisis. The carcinogenic properties of these fuels contribute to air pollution and associated health problems. The regulatory lapses in Nigeria starkly contrast with the proactive measures taken by European nations to safeguard their environments, as seen in the actions of Belgium and the Netherlands. This disparity underscores the need for stringent local regulations to protect Nigerian citizens and the environment.

Furthermore, Edwin’s call to align with ECOWAS regulations and the PIA reflects a broader vision for a self-sustaining Nigerian petroleum industry. By implementing these measures, Nigeria can reduce its dependency on imported refined products, thus retaining more economic value within the country. This alignment would not only enhance local production but also ensure that the benefits of the refinery’s operations are fully realized, promoting economic growth, job creation, and improved public health standards.

Edwin’s allegations against the IOCs and the regulatory authorities serve as a call to action for the Nigerian government. The success of the Dangote Refinery has far-reaching implications, and its support should be a national priority. The refinery’s potential to transform the Nigerian oil and gas sector is immense, and with the right backing, it can overcome the challenges posed by external and internal adversaries.

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