More competition for Dangote refinery as FG declares continuation of fuel importation

• Nigeria's Federal Government has declared that it will continue bringing refined petroleum products into the nation
• It emphasised that undue reliance should not be placed on the $20 billion refinery located in the Lekki Free Zone of Lagos
• The head of the NMDPRA warned that Nigeria could not get all of its fuel from the Dangote plant

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

To avoid monopolies and maintain energy security, the Federal Government of Nigeria has announced that it will keep importing refined petroleum products into the country in addition to the commodities produced by the Dangote Petroleum Refinery.

NMDPA denied claims made by the Dangote Group that the refinery's capacity to supply crude is being hampered by foreign oil companies. Photo Credit: Dangote Refinery, Bloomberg Creative
Source: Getty Images

It stressed that the $20 billion refinery in Lagos' Lekki Free Zone should not be overly relied upon and that its insistence that all oil marketers purchase their goods from it undermines competition.

This occurred after oil marketers condemned the International Oil Companies operating in Nigeria for failing to provide crude to local refiners, prompting the House of Representatives to establish an ad hoc committee to look into claims of non-supply of crude oil to the Dangote refinery.

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What NMDPA says

The Nigerian Midstream and Downstream Petroleum Authority, a government agency, declared that the country would not halt the importation of petroleum products. It argued that Nigeria cannot rely on a single refinery to supply its needs.

Farouk Ahmed, the Chief Executive of NMDPRA, said this to reporters in Port Harcourt.

Ahmed also refuted the Dangote Group's allegations that foreign oil firms are impeding the refinery's ability to supply crude, claiming that the allegations were untrue.

The refinery had been selling aviation fuel and diesel in Nigeria for months, but he also disclosed that it lacked a license, claiming that the Dangote refinery was still in the pre-commissioning phase.

Ahmed declared,

“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.”

The head of NMDPRA issued a warning, saying that Nigeria cannot rely solely on the Dangote refinery to supply its fuel.

He claimed that in order for the refinery to become Nigeria's exclusive fuel supplier, it had asked the regulator to stop granting import licenses to other marketers.

“We cannot rely heavily on one refinery to feed the nation, because Dangote is requesting that we should suspend or stop the importation of all petroleum products, especially AGO, and direct all marketers to the refinery, that is not good for the nation in terms of energy security. And that is not good for the market, because of monopoly,” he stressed.

Meanwhile, An ad hoc committee of the House of Representatives has been established to look into claims that Dangote Refinery and Petrochemicals Limited is not receiving crude oil.

Oil marketers speak on petrol prices

Legit.ng reported that oil marketers expect petrol to be released from the Dangote refinery, as they disclose that the facility’s management has not reached a pricing agreement with marketers on the product.

Legit.ng reported that the refinery announced a new date for the supply of petrol, shelving the July date earlier announced.

Aliko Dangote, president and CEO of Dangote Industries Limited, revealed that the refinery was set to roll out its petrol in August 2024 after it resolved its crude oil supply issues with the help of the Nigerian National Petroleum Company Limited (NNPC) and the Nigerian government.

Source: Legit.ng