FG meets local refiners over pricing, faults Dangote

The Federal Government, on Tuesday, declared that there was no importation of dirty fuel into Nigeria, countering the recent position of an official of the Dangote Petroleum Refinery.

It declared this after meeting with oil marketers and local refiners of crude oil in Abuja, where parties at the meeting discussed issues about refined products’ pricing, issues of competition and the importation of products that are produced in Nigeria.

Also at the meeting, oil marketers stated that though local refineries were producing some of the refined products, this would not stop marketers from patronising other sources, while also buying products from the indigenous producers.

Speaking through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, while reacting to claims of dirty fuel importation to Nigeria, the government stated that refined petroleum products with high-sulphur contents were last imported in February, stressing that this had since been addressed by the regulator.

The Executive Director, Distribution Systems, Storage and Retailing Infrastructure, NMDPRA, Ogbugo Ukoha, disclosed this to journalists after the regulator concluded its meeting with the oil marketers and local crude oil refiners, which had officials from Dangote refinery and modular refineries.

“There is no dirty fuel that is being brought into Nigeria,” Ukoha declared when asked to react to the allegations levelled against the NMDPRA by a senior official of the Dangote refinery.

It was reported on Monday that the Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority of granting licences indiscriminately to marketers to import dirty refined products into the country.

He had stated that even though Dangote was producing and bringing diesel into the market, complying with the regulations of the Economic Community of West African States, “licences are being issued, in large quantities, to traders who are buying the extremely high sulphur diesel from Russia and dumping it in the Nigerian market.”

Edwin had explained, “Since the US, European Union and the United Kingdom imposed a price cap scheme from February 5, 2023, on Russian petroleum products, a large number of vessels are waiting near Togo with Russian ultra-high sulphur diesel and they are being purchased and dumped into the Nigerian market.

“Some of the European countries were so alarmed about the carcinogenic effect of the extra high sulphur diesel being dumped into the Nigerian market that countries like Belgium and the Netherlands imposed a ban on such fuel being exported from its country, into West Africa recently. Sadly, 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.”

But responding to this on Tuesday, the Federal Government’s agency insisted that it had adopted all the stipulated procedures required for the importation of refined petroleum products into Nigeria to halt the inflow of dirty fuels.

It further stated that refineries in Nigeria were also taking steps to see that the refined products that they produce conformed with the standards approved by ECOWAS for the region.

Ukoha said, “NMDPRA takes very seriously its statutory mandates to ensure that only quality petroleum products are supplied and consumed in Nigeria. A lot of people do not know the backgrounds that I’m to provide now.

“The ECOWAS heads of states in 2020 endorsed a declaration adopting a fuel roadmap that requires that certain products should have as a minimum 50 parts per million litres of sulphur. Whilst it encouraged almost immediate enforcement against imports to comply with standards, the same treaty deferred enforcements for local refiners up to December 31, 2024.

“Now the PIA (Petroleum Industry Act), when it was passed in 2021, section 317 also captured and upheld these ECOWAS treaties. So as an authority, what have we done since we came into being? We started by engendering compliance. We saw a downward trend up to 2022 till December 2023.

“However, in December 2023 and January this year, we noticed a spike in the sulphur contents of products being imported and we again began strong enforcement from February 1. But I am happy to tell Nigerians that up until June, and till now as we speak, the average sulphur content in every AGO that is brought into Nigeria is below the 50ppm position in the law.”

With the local refiners, Ukoha stated that the declaration deferred it, adding, “So they continue to produce at a higher level, but we are not very anxious about that because even the new refineries that are coming in have within the design of their plants, the sulphurisation units that will see in the nearest future that sulphur goes down to as low as 10ppm.

“And so I would like to assure Nigerians that this is a mandate that the authority takes very seriously and that we are here to guarantee the wellbeing and health of Nigerians, and there is no dirty fuel that we will encourage to come into Nigeria.”

Asked to specifically react to claims that the NMDPRA had been dishing out fuel importation licences, leading to dirty fuel importation, despite the production of refined products from the Dangote refinery, Ukoha insisted that no dirty fuel would be allowed into Nigeria.

“I have answered that question; I said there is no dirty fuel being brought in, and I have given you the statistics for June and that what we have on the average from imports has continued to go down from 200ppm on the average.

“And now we have it far below the 50ppm that is in the law. And then with the refineries, there is no need to enforce that until the end of this year. But they are taking steps to see that that is also guaranteed.”

Earlier during the meeting with oil marketers and local refiners, Ukoha explained that the meeting was a continuation of engagements which the parties had been having in the last weeks.

“The NMDPRA today engaged with select marketers who are involved in the importation of AGO (diesel), ATK (aviation fuel) and PMS (petrol), as well as refiners of these products. The singular objective is to continue to collaborate in a manner that guarantees energy security within the country,” he stated.

He said discussions at the meeting covered issues of pricing and competition, adding that the agency would continue to engage with operators “to see that we land at a place where it is ultimately beneficial to Nigerians.”

He added, “On May 14, 2024, the authority hosted a meeting with marketers. We also had an engagement with refiners separately. What is different today is that both refiners and marketers are around the table, and the singular objective of today’s meeting was to continue to deliberate on how we will guarantee fuel supply stability within a fairly priced market.

“There are several issues that came with that, such as pricing issues, competition, quality, etc. Some of these issues will be ongoing, but all it requires will be continuous engagements and consultations.”

Responding to claims that the government was trying to force marketers to buy products from a refinery in Nigeria, the NMDPRA official said, “What we have in Nigeria is a deregulated market that remains open.

“The law that governs us, which is the PIA, makes several provisions and the authority continues to work towards operationalising all of them. So that’s the guarantee we give, that in the fullness of time, all aspects of the PIA will be operationalised.”

Asked to state the refined product that was considered by parties at the meeting, Ukoha said, “Currently, the refiners locally are producing substantial volumes of AGO (diesel), ATK (aviation fuel) and we have assurances that shortly PMS will also kick in. There are also other intermediate products being produced.”

The Group Managing Director, RainOil Ltd, Gabriel Ogbeche, said marketers were free to source products anywhere, but noted that local refiners were being patronised.

“One of the things we’ve agreed is that there’s going to continually be a level playing field between the marketers and refiners. We will continue to collaborate for the best interest of the industry,” he said.

Asked to state the challenges faced by marketers operating in the downstream sector which they would want the government to address, Ogbeche replied, “Up till today we have options and I can assure you that all the major marketers have been patronising the local refineries and we will continue. We also have the option of getting products from other sources and to the best of our knowledge that has not changed, even though conversations around that are ongoing.”

On his part, the Group Chief Commercial Officer, of Dangote Group, Rabiu Umar, said, “It was a very production meeting. We believe that this meeting is just one of many to come that will move this industry in the right direction.”

There have been concerns lately that oil marketers were boycotting the Dangote refinery by importing diesel into Nigeria, despite its massive production locally by the $20bn refinery located in Lagos.