Africa's richest man accuses IOCs of sabotaging Dangote Oil Refinery operations

Oluwatosin Racheal Alabi -

Key points:

  • Devakumar Edwin, vice president of oil and gas at Dangote Industries Limited (DIL), has accused International Oil Companies (IOCs) operating in Nigeria of sabotaging the Dangote Oil Refinery and Petrochemicals.
  • Edwin criticizes the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for granting licenses to import dirty and carcinogenic refined products.
  • Edwin calls on the Federal Government to implement the Petroleum Industry Act (PIA) fully, stop issuing licenses for dirty fuel imports, and support local refining to boost economic prosperity.

Devakumar Edwin, vice president of Oil and Gas at Dangote Industries Limited (DIL), has accused International Oil Companies (IOCs) operating in Nigeria of sabotaging the Dangote Oil Refinery and Petrochemicals.

Edwin claims that the IOCs are deliberately frustrating the refinery’s efforts to procure local crude oil by imposing exorbitant premium prices, forcing the company to import crude from distant countries such as the United States, thus incurring additional costs.

Criticism of regulatory practices

Speaking at a one-day training program organized by the Dangote Group for Energy Editors, Edwin expressed concerns over the activities of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). He criticized the regulator for indiscriminately granting licenses to marketers, allowing the import of dirty refined products into Nigeria.

“The Federal Government issued 25 licenses to build refineries, and we are the only one that delivered on our promise. We deserve every support from the Government,” Edwin stated.

“From the start of production, more than 3.5 billion liters, which represents 90 percent of our output, have been exported. We call on the Federal Government and regulators to give us the necessary support to create jobs and prosperity for the nation,” he said.

Challenges in procuring local crude

Edwin explained the challenges faced by the refinery stating that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is trying its best to allocate crude oil for the refinery. However, the IOCs are intentionally obstructing efforts to purchase local crude.

“The IOCs are either asking for ridiculous premiums or claiming that crude is unavailable. At some point, we paid $6 above the market price, forcing us to reduce our output and import crude from as far as the US, increasing our production costs,” Edwin lamented.

Impact of dirty fuel imports

He accused the IOCs of having a strategy to ensure Nigeria remains dependent on exporting crude oil and importing refined petroleum products.

“The IOCs export raw materials to their home countries, creating employment and wealth for themselves while dumping expensive refined products into Nigeria. This exploitation has led to unemployment and poverty in Nigeria and Sub-Saharan Africa,” Edwin claimed.

Edwin also condemned the NMDPRA for issuing licenses that allow the import of high-sulfur diesel and other carcinogenic products, despite the refinery’s compliance with ECOWAS regulations and standards.

“Licenses are being issued to traders who buy extremely high-sulfur diesel from Russia and dump it in the Nigerian market. Since the US, EU, and UK imposed a price cap on Russian petroleum products from February 5, 2023, many vessels with Russian ultra-high sulfur diesel have been waiting near Togo and are being purchased and dumped into the Nigerian market,” he revealed.

International response and environmental concerns

Belgium and the Netherlands recently adopted new quality standards to halt the export of low-quality fuels to West Africa, aligning their standards with the European Union. Belgium’s Minister of Environment, Zakia Khattabi, highlighted the negative impact of toxic fuels on air quality in countries such as Nigeria, Ghana, and Cameroon, noting that these fuels are carcinogenic.

In September 2017, an investigation by the international organization Public Eye revealed that polluted and toxic fuels were being exported on a large scale from the ports of Rotterdam and Amsterdam to African markets. These fuels contain high levels of sulfur and benzene, far exceeding European limits.

The NMDPRA’s decision to grant licenses for importing dirty diesel and aviation fuel has forced the Dangote refinery to expand into foreign markets.

Despite these challenges, the refinery has successfully exported diesel and aviation fuel to Europe and other parts of the world, complying with international standards and stringent guidelines.

Call for governmental support

Edwin called on the Federal Government and the National Assembly to urgently intervene and ensure the full implementation of the Petroleum Industry Act (PIA) to protect Nigeria’s interests.

“The government of Ghana has banned the importation of highly contaminated diesel and PMS. It is regrettable that Nigeria continues to grant import licenses despite our capacity to produce nearly double the amount needed locally and export the surplus. ECOWAS regulations have prohibited the import of highly contaminated diesel since January 2021,” he emphasized.

As the Dangote refinery continues to face obstacles, the call for governmental support and stricter regulations remains important for the progress of Nigeria’s oil industry and economic prosperity.