Concerns have been raised by operators in the downstream oil sector regarding the Dangote Petroleum Refinery, prompting calls for government intervention. Marketers are reportedly opting for cheaper imported refined petroleum products over those from the Dangote refinery, citing cost disparities. The main issue is the alleged sale of crude oil to Dangote at prices above global market rates by International Oil Companies (IOCs), which is seen as detrimental to local interests.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) attributes the preference for imported products to the higher cost of diesel and aviation fuel produced by the Dangote refinery. Despite efforts to collaborate with Dangote, IPMAN’s National President, Abubakar Maigandi, claims that Dangote has been reluctant to adjust prices to compete effectively in the market.
“The fact that people bring in diesel from other countries into Nigeria is his fault. It is because of his price. You know I said earlier that he should bring his price down so that he would discourage importation by the other marketers. His price is higher. If it is lower, why should people buy outside?” the marketer stated.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, criticizes the IOCs for allegedly undermining the refinery’s operations. He highlights significant exports of diesel and aviation fuel to Europe, but notes challenges persist due to high local operating costs and regulatory issues.
The Dangote Group accuses IOCs of restricting access to affordable local crude, necessitating costly imports from the United States. This situation inflates operational expenses, affecting local pricing dynamics unfavorably.
Stakeholders, including the Petroleum Products Retail Outlets Owners Association of Nigeria and IPMAN, urge the government to enforce measures ensuring equitable access to crude oil for domestic refining. This, they argue, is crucial for stabilizing prices and promoting local economic growth.
“Again, we gave him a policy that he should involve independent petroleum marketers in direct purchases from him. Up till now, he didn’t do that.
“The idea is, immediately you hold independent petroleum marketers, definitely you are the one who is having the market of the country.
“We told him that he should allow independent marketers to start buying fuel directly from him, but he refused. He just holds on to all these multinational companies. These multinational companies will sabotage his efforts because they will tell him that they would buy, but if they buy a little from him, they will go outside to buy another one that is cheaper than his own,” he stated.
READ ALSO: IPMAN Affirms Marketers Will Make Payment in Naira For Dangote Fuel
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) faces accusations of issuing licenses facilitating the importation of substandard fuels. The NMDPRA has yet to respond to these allegations, despite calls for clarification from industry players.
The situation highlights ongoing tensions in Nigeria’s oil sector, where stakeholders grapple with pricing disparities, regulatory challenges, and allegations of anti-competitive practices. Government interventions and regulatory decisions will shape the future landscape of the downstream oil industry in Nigeria.
