House of Representatives has set up a committee to investigate the allegations made by Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) against Dangote refinery and the counter claim made by Dangote against the regulator. The committee is to look into crude oil supply shortages to local refineries and importation of dirty fuels by importers. The two issues are at the heart of a rift between the Dangote Refinery and Nigeria’s down stream oil regulator. The committee constituted by the House will investigate alleged importation of dirtier fuels, operations of standards agencies, why refineries including Dangote Refinery are unable to get adequate crude supplies and rising fuel queues.
“Our investigation will proceed in phases beginning with the allegation of production and importation of sub standard petroleum products and unavailability of crude oil to domestic refineries,” said Ikenga Ugochinyere, a co-char of the committee. The findings of the investigative panel, which does not have the power to act on them, will be presented to the House from which recommendations would be made to the president. The $20 billion Dangote Oil refinery, built by Africa’s richest man Aliko Dangote on the outskirts of Lagos, began operations in January but has been unable to get adequate crude supplies from Nigeria where vandalism, sabotage and low investments deter production. Last month, the Dangote Refinery said oil majors were blocking its access to locally produced crude and the regulator was allowing fuel traders import high-sulphur petrol thereby undermining its refinery.
In response, the head of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the downstream regulator, said the Dangote Refinery was 45 per cent completed hence unable to meet the country’s needs. He also said petrol processed by the refinery is between 650 to 1200 parts per million of sulphur, thus inferior to imported products. Nigerian regulation allows for the sulphur content in petrol to be about 50 ppm and is set to begin enforcing the standards from next year.
When some lawmakers visited the plant on Saturday, Africa’s richest man, Aliko Dangote insisted on a test of the petrol from his plant with others sold in the local market. The result showed that Dangote Refinery’s diesel had a sulphur content of 87.6 ppm, whereas the other two samples showed sulphur levels exceeding 1800 ppm and 2,000 ppm, respectively. Dangote announced he was no longer proceeding with an investment into steel production in Nigeria due to allegations that he seeking to be a monopoly. The investigative panel said it will conduct a forensic audit of the entire sector. “The committee is urging stakeholders in the current dispute to deescalate tensions as the committee embarks on the great task of resolving the issue,” Ugochinyere co Chair of the committee said.
