Business

Fuel Import: FG Working Against Local Refineries – Operators Allege

Published

5 months ago

July 22, 2024

Refinery

Several operators of local refineries have expressed dissatisfaction with the recent announcement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), indicating that the Federal Government intends to persist with fuel imports, suggesting a stance against the local refining sector.

The Eaglesforesight gathered that the operators, represented by the Crude Oil Refiners Association of Nigeria, have voiced concerns over a recent interview with the Chief Executive Officer of NMDPRA, Ahmed Farouk.

In the interview, Farouk was quoted as characterizing locally produced diesel as ‘inferior’ compared to imported alternatives.

Furthermore, it was reported on Friday that the Federal Government, through NMDPRA, has affirmed its commitment to the continued importation of refined petroleum products alongside the production efforts of the Dangote Petroleum Refinery.

This decision aims to prevent monopoly and ensure the energy supply’s security.

The government has also cautioned against excessive reliance on the $20 billion refinery in the Lekki Free Zone in Lagos, emphasizing that the refinery’s demand for all oil marketers to source their products from the facility could hinder competition.

In an interview with journalists in Port Harcourt, the capital of Rivers State, Farouk was alleged to have made a statement regarding the quality of diesel produced by certain local refineries, which he described as inferior to imported diesel, a statement that has caused distress among local refiners.

Operators Lament

In response to the regulatory stance, the Indigenous crude oil refiners have declared that the government’s position appears to favour imported fuels over local production.

The Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, said, “We are worried that the Chief Executive of NMDPRA would make such categorical statements, suggesting strongly that he is taking sides. So much so that he even ridicules his own agency’s processes when he refers to the petroleum products produced by refineries that his agency closely regulates as inferior, thereby undermining the country’s health and safety procedures. This has huge implications for the oil and gas industry, and energy security in Nigeria.”

The NMDPRA boss had stated that Dangote Refinery had requested the regulator to stop giving import licences to other marketers to be the only fuel supplier in Nigeria.

“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 it is not good for the market because of monopoly,” Farouk stressed.

However, local refiners alleged that the views of the NMDPRA boss had shown that many detractors were discrediting the efforts of indigenous refineries.

“In the last few days, we have had a barrage of misinformation thrown at the indigenous refineries, including Dangote, Aradel, Waltersmith, and our other members, from detractors and elements working against the country’s quest to achieve self-sufficiency in domestic petroleum refining. This is not completely surprising to us as we know the agenda to keep the country perpetually dependent on foreign oil merchants, and the desire to continue to pilfer the wealth of the country by a few greedy individuals is deep.

“It is, however, surprising, and we are indeed dismayed, that a person meant to regulate a sector appears to be taking a position against players in the industry he is supposed to be regulating and is misstating the facts,” Idoko stated.

Idogo further argued that about two years ago, the NMDPRA confirmed that the Dangote refinery was over 90 per cent completed, and wondered why the agency’s boss would declare that the plant had not been completed and was operating without a licence.

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“From the two reports I shared with you, you can see Farouk contradicting the organisation he oversees in an obvious attempt to discredit the efforts of local refineries in the country. This struggle is not about an individual or a particular company. It is about the country and its survival. It is about the Nigerian citizenry. At this rate, we are truly worried about the ability of NMDPRA to provide a level playing field for all stakeholders going forward,” the indigenous refiners stated.

According to The PUNCH, the head of the NMDPRA boss had during an interview disclosed that the Dangote refinery, which had been distributing diesel and aviation fuel in Nigeria for several months, was operating without a license, indicating that the facility was still in the process of being commissioned.

Furthermore, the Executive Secretary of the Major Energy Marketers Association of Nigeria, Clement Isong, characterized the remarks made by the NMDPRA as straightforward and to the point. Isong informed our reporter that the industry requires such transparent communication from the regulatory body.

“Clear and direct! We need this open and direct communication from time to time from the regulator to help the public dissect the issues that so seriously concern them,” he stated.

On his part, the head of Public Relations for the Independent Petroleum Marketers Association of Nigeria, Ukadike Chinedu, has voiced his disapproval of the Nigerian National Petroleum Company Limited, as well as the international oil companies present in Nigeria, and the NMDPRA, for allegedly causing difficulties for local refiners.

He claimed that the international oil companies and the Nigerian National Petroleum Company Limited were not providing sufficient crude oil to the Dangote refinery and the modular refineries, further stating that the accusations made by the NMDPRA against local refiners were unwarranted.

“Those claims were unnecessary. We all know that these indigenous refiners are truly going through a lot, particularly with respect to accessing crude oil needed to produce refined products. So, they have a right to complain about this, knowing that Nigeria is a crude oil producer that exports this commodity to other refineries in foreign nations. You export the product, while your refineries are being starved. That’s not a good thing,” Ukadike stated.