Need to Protect Dangote Refinery from Saboteurs

Following revelations by the Dangote Refinery that the international oil companies operating in Nigeria, and petroleum products marketers aided by the downstream regulator are plotting to frustrate the 650,000 barrels per day facility, many Nigerians have called for urgent actions by the federal government to protect the $20 billion refinery from collapse, Peter Uzoho reports

Last Sunday, Nigerians received in shock the startling revelations by the Dangote Industries Limited that the international oil companies (IOCs) operating in Nigeria were doing everything to frustrate its 650,000 barrels per day refinery by not giving it crude produced in the country to run the plant.

The Aliko Dangote-owned group also alleged that the downstream regulator -the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), was still granting import licences, indiscriminately, to marketers to import dirty refined products into the country (even when the refinery produces large volume of high quality products to meet local demand).

It added that the federal government issued 25 licences to investors to build refineries, but Dangote Refinery was the only one that delivered on its promise.

At a time Nigeria is witnessing an exodus of foreign companies from the shores of the country with huge adverse socio-economic impact on the nation, it is expected that the federal government should do everything within its powers to protect investment of Nigerians in the country such as Dangote Refinery, owing to its immense benefits to the nation.

To many Nigerians, it is highly inconceivable that a refinery owned by a Nigerian, established in the country, cannot get crude oil produced in Nigerian soil to run its refinery and produce petroleum products for the country.

However, owing to the game-changing impact of the Dangote Refinery to the nation’s socio-economic and industrial development, the actions of the IOCs, the oil marketers and the NMDPRA have attracted responses from concerned citizens who have called on the government to do everything within its powers to protect the refinery from the plots of the saboteurs. In their interventions, civil society organisations, Nigerian students and social media users, analysts and local crude oil refiners have jointly risen in defence of Dangote Refinery, urging the federal government to protect the refinery against any form of sabotage.

The Dangote Refinery owned by Africa’s richest person, Dangote has been in operation since January this year, producing high quality diesel, aviation fuel and naphtha, with the Nigerian market now enjoying the benefit of in-country production of petroleum products from the refinery.

The plant has the capacity to meet 100 per cent of the Nigerian consumption need of all refined products (including petrol  53 million litres per day; diesel, 34 million litres per day; kerosene, 10 million litres per day, and aviation jet, two million litres per day) and has a surplus of each of the products for export, thus ending Nigeria’s dependence on imported petroleum products.

The Sabotage

The Vice President, Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin recently accused IOCs in Nigeria of doing everything to frustrate the survival of Dangote Oil Refinery and Petrochemicals.

A statement by the Dangote Group last Sunday, quoted Edwin to have made the allegations during a one-day training programme for energy editors, organised by the company. He specifically said the IOCs were deliberately and willfully 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 United States, with its attendant high costs.

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.”

He added, “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.”

He also lamented that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was still granting import licences, indiscriminately, to marketers to import dirty refined products into the country.

Edwin disclosed that the federal government issued 25 licences to investors to build refineries, but Dangote Refinery was the only one that delivered on its promise.

He said the Dangote group deserved every support from the Nigerian government, especially with the Domestic Crude Supply Obligation (DCSO), as specified in the enabling law.

Edwin pointed out, “It is good to note that from the start of production, more than 3.5 billion litres, which represent 90 per cent of our production, has 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.” He added, “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.”

The company said the decision of the NMDPRA to keep granting licences indiscriminately for the importation of dirty diesel and aviation fuel,  had made the refinery to expand into foreign markets. Edwin added, “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 stated that because the refinery met the international standard and complied with stringent guidelines and regulations to protect the local environment, it had been able to export its products to Europe and other parts of the world.

He appealed to the federal government and the National Assembly to urgently intervene for speedy implementation of the PIA and to ensure the interest of Nigeria and Nigerians were protected.

Nigerians Seek FG’s Action

Following the revelation by the Dangote Group on its frustration in accessing crude oil in-country, Nigerians in the civil society space and on social media rose in defence of the refinery, calling out IOCs for sabotaging the operations of the multi-billion dollar facility by not selling crude produced in Nigeria to it.

The Netizens voiced their displeasure over the efforts of the IOCs and local oil marketers to frustrate the refinery, stating that the federal government must protect the Dangote refinery against any form of sabotage. Coordinator of a civil society group, known as Initiative for Defence of Democracy and Justice, Alhaji Aliyu Kaoje, who spoke to told journalists, warned, “Let us sound a strong warning to them to desist forthwith whatever they are doing directly or indirectly to frustrate the operations of the refinery.”

Speaking on Arise News Channel, the Chief Executive Officer, ThinkBusiness Africa, Dr. Ogho Okiti, stressed that, “If there is a kind of saboteur anywhere, the federal government should do all to contain it. This refinery is not just for the interest of Aliko Dangote, it should not be seen as a Dangote problem, but a national problem because this is a national asset. This asset is part of the solution to our energy crisis in Nigeria.”

In his intervention, financial planning expert, Kalu Aja, posited, “If Dangote needs crude, Nigerian National Petroleum Company (NNPC) should support its 20 per cent investment by giving Dangote its oil equity.”

The Publisher of Sweet Crude Reports, Mr.  Hector Igbikiowubo, asked, “How come the NNPC isn’t allotting all of its 445,000 barrels per day (crude meant for its four refineries) to the Dangote Refinery for refining?”

An X user, with the handle, AgriGATE Nigeria, tweeted that “If @DangoteGroup @AlikoDangote refinery fail, then @NigeriaGov can be said to be complicit in conspiracy against the refinery. American government goes extra length to protect interest of American companies. Ours can’t be left at mercy of international oil companies.”

Another X user, Eguando, appealed to President Bola Tinubu to protect and liberate the economy by making the Dangote Refinery work, adding that the refinery needs all the supports it requires to succeed.

“They the IOCs have enjoyed exporting our Crude oil the last 60 years or more without building one refinery each or collectively building one for us as a country to reap the benefit, yet one Nigerian has taken the initiative and they want to do everything to derail it.”

Another user, Ayodeji Oluwadamilare added that “I am not even surprised there are people who want that refinery to fail. They enjoy the status quo of subsidy and don’t want it to end… Wicked humans… They will be shamed at last…”Also, Shimsun, another X user, tweeted, “The IOCs must be brought to heel and the corrupt civil servants at NMDPRA who are bent on keeping the system poisonously inefficient should be made to answer for their actions.”

On his part, Oseni Lanre stated that “The refinery has to work and it must now!”

Local Oil Refiners Back Dangote

Also worried by the actions of the IOCs and indigenous producers against the Dangote Refinery, Local crude oil refiners under the umbrella of the Crude Oil Refineries Association of Nigeria (CORAN) threw their weight behind the refining company. The association stressed that the consumers can only purchase petroleum products if refineries in the country are made to function.

Speaking on a national television, Chairman of CORAN, Mr. Momoh Oyarekhua, corroborated claims by Dangote Refinery that some IOCs were actively obstructing the refinery’s operations by refusing to guarantee and provide crude supply. Oyarekhua said, “I will take it from the angle of producers of crude rather than focusing on the IOCs alone.  What we usually call IOCs are the international producers, but I do not think it is just about the international producers and operators in Nigeria, I think it’s more about the producers of crude in Nigeria that are perhaps frustrating the refineries in Nigeria from getting crude.

“In fact, we have been on this journey, I particularly have been on this journey of advocating for crude sales to local refineries and also where necessary for the modular refineries for crude to be sold to them in naira because most of our products are produced into the local market and income is actually in Naira and it is just commonsensical that if you sell product in naira you should be able to get your feedstock in naira, mostly when that feedstock is produced in naira so that you don’t put pressure on the US dollar that is already scarce in the country.

“We have had several engagements with the NUPRC and all of that and it is clear that in the PIA Law, in section 109, there is DCSO which is supposed to be Domestic Crude Supply Obligation to support the local refineries and I think that law was specifically put there by legislators not to starve the refineries. But what we have seen is a huge and still resistance by the producers of crude in Nigeria. They will rather prefer to export crude abroad than to sell to local refineries.”

He insisted that the cost of finished products would reduce drastically if local refining is encouraged, instead of the importation of finished refined products that do not even meet quality standards

“We all saw that when Dangote came on stream, diesel dropped from N1,600 to about N1,200, and as we speak today, from our refineries, we are even selling less than N1,100. This is to tell you how far producing crude locally can support the economy and can support the people of Nigeria,” Oyarekhua said.