Oil & Gas sector experts at the weekend expressed displeasure over the allegation by the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ahmed Farok on Thursday that the diesel and Jet A produced by Dangote Refinery and other local refineries in the country are of low quality compared to imported ones.
They described the statement as an attempt to demarket the local refiners who have invested heavily in the country’s effort to wriggle out of years of importation of petroleum products and payment of the controversial petrol subsidy.

Recall that Ahmed had in reaction to allegation by Chairman of Dangote Industries Limited (DIL), Alhaji Aliko Dangote that the NMDPRA was giving licences to some traders to import dirty fuel into Nigeria, argued that it was the Dangote fuel that had the larger content of sulphur.

Ahmed revealed that the refinery, which has been selling diesel and aviation fuel in Nigeria for months, has not been licensed, stating that it is still at the pre-commissioning stage.
“The claim by some media houses that there were steps to scuttle the Dangote refinery is not so. The Dangote refinery is still in the pre-commissioning stage. It has not been licensed yet; we haven’t licensed them yet. They are still in pre-commissioning. I think they have about 45 per cent completion,” he declared.

Speaking about quality, he said, “So, in terms of quality, currently the AGO quality in terms of sulphur is the lowest as far as the West African requirement of 50 ppm is concerned.
“Dangote refinery and some modular refineries, like Waltersmith refinery and Aradel refinery, are producing between 650 to 1,200ppm. So, in terms of quality, their product is much more inferior to the imported quality,” he alleged.

Speaking on TVC in interview, monitored by Sunday Telegraph, a former Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore decried the challenges Dangote Refinery is facing sourcing crude oil from Nigeria, saying a second look should be taken at the Petroleum Industry Act which is emphasizing deregulation.

He said, “The Buhari administration which signed it into did nothing at its implementation but now that we have a President that is determined to see the industry grow, a second look should be taken on the law. What has been done is deregulation of price, but what needs to be done is to deregulate supply so that many suppliers will come on board and as well enough encouragement should be given to the ones that are already there.”

Financial planning expert, Kalu Aja, said these challenges and allegations are indications that the coming on stream of Dangote Refinery will dislocate the status quo and displace entrenched interests. “If Dangote needs crude, NNPCL should support its investment in the company by giving Dangote its oil equity, it will by so doing, be ensuring that the country achieves energy security.”
Speaking also on the Channels Television programme, Hector Igbikiowubo, publisher of Sweet Crude Reports asked that “how come the NNPC isn’t allotting all of its 445,000 barrels per day to the Dangote Refinery for refining.”

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

Another X user, @Gviev commented, “I hope the Central Bank of Nigeria Governor and Minister of Finance are listening to this man. We are talking about promoting local production and exports to reduce demand for foreign exchange and strengthen the naira. He and the oil marketers are rather focused on their selfish interest to keep importing and depressing the naira.
“You should be talking about competition for local producers instead of trying to manipulate Nigerians to focus on your propaganda that Dangote wants a monopoly. Well, it’s Nigeria that will suffer because Dangote Refinery will just focus on exports.”

How Nigeria will benefit if Dangote Refinery succeeds
Experts familiar with the industry have said that the billions of naira spent on fuel importation and subsidies payment would be saved when the Dangote refinery comes onboard.
Recently, Aliko Dangote, during an interview with the Economist Magazine, disclosed that the company could save Nigeria $10 billion in foreign exchange (FX) and generate another $10 billion in exports when the facility begins operation.
Speaking to Sunday Telegraph in separate interviews, the Chairman of International Energy Services, Dr Diran Fawibe, Bala Zakka, and Nick Agule said the Dangote Refinery would be a game-changer in Nigeria’s downstream petroleum industry.
Fawibe said he was optimistic that the emergence of Dangote Refinery would end fuel and diesel importation in Nigeria.
“The refinery coming on stream will have a tremendous impact on the petroleum industry and the Nigerian economy. You have a situation right now where Nigeria is spending up to 30-33 per cent of foreign exchange earnings on importing petroleum products into the country.
“If Dangote Refinery’s product goes on full steam, this will end this importation; in other words, we shall no longer be importing petroleum products,” he said.
Similarly, Agule said the entrance of the Dangote Refinery would save a lot of revenue that could have been spent on transportation costs during importation of petroleum products into the country.
“We will save costs from the importation of petroleum products. Currently, Nigerian consumers or the government (through subsidies) are paying the cost of shipping crude to foreign refineries, the cost of refining at high costs with a minimum wage of over $1000 in foreign refineries, taxes paid by foreign refineries, the cost of shipping the products back to Nigeria, including insurance, clearing and demurrage. Dangote Refinery will not incur all these costs and the Government’s huge expenditure on subsidies will be saved,” he noted.

Also, Zakka aligned with Agule and Fawibe on the economic benefits of the Dangote Refinery.

He noted that if properly harnessed, the Dangote Refinery would lead to the end of persistent fuel scarcity in Nigeria.

The 650,000 barrels per day capacity Dangote Refinery would give excess of Nigeria’s currently consumed daily 45 million litres of petrol.