Downstream (petroleum industry) professionals urged the Federal Government to step in and guarantee the supply of crude oil to the Dangote Refinery. This comes as market participants increasingly opt for purchasing lower-priced imported Petroleum products instead of supporting Dangote’s refinery. International oil companies in Nigeria were criticized for selling crude oil to Dangote Refinery at prices that exceeded global market prices, a practice deemed harmful to the country The Independent Petroleum Marketers Association of Nigeria (IPMAN) clarified that the reluctance of marketers to purchase diesel and Aviation fuel from the Dangote refinery was due to the products’ higher prices.
Abubakar Maigandi, the National President of IPMAN, responded to allegations made by the Dangote refinery about selling 3.5 billion litres of refined products to Europe and other nations due to the importation of low-quality fuels by some marketers in Nigeria. Maigandi believes that the $20bn refinery project is being impacted by Aliko Dangote’s decision not to work with IPMAN, the President of the Dangote Group. Devakumar Edwin, the Vice President of Oil and Gas at Dangote Industries Limited, alleged that international oil companies operating in Nigeria are conspiring to obstruct the success of the newly established Dangote refinery.
The IOCs were heavily criticized by oil marketers.
Out of the 25 refinery Construction licenses issued by the Federal Government in Nigeria, only the Dangote Group was able to fulfill their promise, according to Edwin. In contrast, he observed that the refinery had shipped over 3.5 billion litres of Dangote diesel and aviation fuel to Europe in recent months, representing 90 percent of its total production. Maigandi revealed that despite marketers advising Dangote to lower the current prices of diesel and aviation fuel in order to outshine competitors, he chose not to take their advice.
According to the IPMAN leader, the easy availability of cheaper products from the Dangote refinery would discourage the importation of inferior quality fuel. Dangote’s recent announcement mentioned that Nigeria will become self-sufficient in fuel production once the sale of PMS begins in the third week of July. The IOCs were heavily criticized by oil marketers for setting the price of crude oil for the Dangote Petroleum Refinery $6/barrel higher than the global market price, which was seen as detrimental to the country’s interests.
IOCs were increasing the cost by $6 above market price.
Furthermore, the downstream oil sector dealers, represented by IPMAN and the Petroleum Products Retail Outlets Owners Association of Nigeria, insisted that the Federal Government must require the International Oil Companies (IOCs) to provide crude oil to the refinery. Edwin from Dangote Group accused the IOCs of intentionally obstructing the refinery’s attempts to purchase local crude oil. He claimed that the IOCs were increasing the cost by $6 above market price, leading the refinery to resort to importing crude oil from the US at a much higher expense.
PETROAN President, Billy Gillis-Harry, criticized the Dangote refinery official’s statements about the increase in domestic crude oil prices by IOCs. He emphasized the importance of prioritizing the country’s welfare, well-being, and Economic Growth when conducting business within its borders. The Nigerian government needs to take action, not only in the oil and gas industry, but particularly in the Trade and Investment sector, by implementing new regulations for conducting business within the country. Chief Ukadike Chinedu, the Public Relations Officer of IPMAN, emphasized the need to oppose the increase in crude oil prices by IOCs.
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He highlighted that the Dangote refinery’s in-country refining has led to stabilized prices and availability of refined products. His argument was clear: the government must step in to prevent the unjust increase in crude oil prices for local refiners. This should not be tolerated, and immediate action is necessary. NUPRC’s CEO, Gbenga Komolafe, has pledged to meet the needs of domestic refiners by supplying them with the necessary crude oil. This commitment was made in response to a recent surge in demand for crude oil. According to him, the NUPRC has created a new template for Domestic Crude Oil Supply Obligation activities, following Section 109(2) of the Petroleum Industry Act 2021. This development marks a significant milestone.