LAGOS, July 22 – Nigerian lawmakers have established a committee to investigate crude oil shortages at local refineries and the importation of substandard fuels. These issues are central to a conflict between the Dangote Refinery and Nigeria’s downstream oil regulator.
Thank you for reading this post, don't forget to subscribe!The committee, formed by Nigeria’s lower parliament, will probe the alleged importation of dirty fuels, the functioning of standards agencies, the reasons behind inadequate crude supplies to refineries including the Dangote Refinery, and the increasing fuel queues.
“Our investigation will proceed in phases, starting with the allegations of substandard petroleum products and the unavailability of crude oil to domestic refineries,” stated Ikenga Ugochinyere, co-chair of the committee.
The investigative panel will present its findings to parliament, which will then make recommendations to the president. The panel itself does not have the power to act on its findings.
The $20 billion Dangote Oil Refinery, established by Africa’s richest man Aliko Dangote on the outskirts of Lagos, began operations in January but has struggled to secure adequate crude supplies from Nigeria, where vandalism, sabotage, and low investments have hampered production.
Last month, the Dangote Refinery accused oil majors of obstructing its access to locally produced crude and criticized the regulator for allowing the importation of high-sulfur gasoil, undermining its operations.
In response, the head of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that the Dangote Refinery was only 45% completed and thus unable to meet the country’s needs. He also claimed that the gasoil processed by the refinery had a sulfur content between 650 to 1200 parts per million (ppm), which is inferior to imported products. Nigerian regulations allow for a maximum sulfur content of 50 ppm in gasoil, with enforcement set to begin next year.
During a visit to the plant on Saturday, Aliko Dangote insisted on testing the gasoil from his refinery against other products sold in the local market. The test results showed that Dangote Refinery’s diesel had a sulfur content of 87.6 ppm, while other samples had sulfur levels exceeding 1800 ppm and 2000 ppm, respectively.
Dangote also announced he would no longer pursue an investment in steel production in Nigeria due to allegations that he was attempting to establish a monopoly.
The investigative panel plans to conduct a forensic audit of the entire sector. “The committee is urging stakeholders in the current dispute to deescalate tensions as we embark on the significant task of resolving the issue,” Ugochinyere said.
