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Nigeria’s Premium Motor Spirit (petrol) import has increased to 2.3 billion litres from September 11 to December 5, 2024, despite the coming on stream of Dangote and Port Harcourt refineries.
This is according to an available document from the Nigerian Ports Authority.
Continued fuel importation comes despite commitment by oil marketers and the Nigerian National Petroleum Company Limited to halt imports.
Dangote Refinery, with a 650,000-barrel-per-day production capacity, and Port Harcourt refinery commenced production and truckout of PMS on September 15 and 26 November 2024, respectively.
However, data from NPA showed that fuel importation has persisted despite the ramp-up of domestic PMS production by Dangote and Port Harcourt refineries.
DAILY POST gathered that in the past three days alone, a total of 52,000 metric tonnes of petrol were brought into the country.
About 1322.76 litres of petrol weighs one metric tonne. This implies that 68.74 million litres of imported fuel were brought in by dealers in three days.
The products were conveyed in three vessels and berthed at the Apapa Port in Lagos State, Tin Can Port in Lagos State, and the Calabar Port in Cross Rivers.
A further analysis of the import document showed that on Tuesday, December 3, 2024, a ship named Binta Saleh carrying 12,000 MT (15.864 million litres) of petrol berthed at the Apapa port at 8:12 am.
The vessel had Blue Seas Maritime as its agent and was handled at the Bulk Oil Plant terminal.
On Wednesday, December 4, 2024, another vessel named Shamal brought in 20,000 mt (26.44 million litres) of petrol through the Tincan port at midnight. The ship was handled by the Peak Shipping Agency at Terminal KLT Phase 3a.
Similarly, another vessel named Watson will bring in 20,000 MT (26.44 million) of refined fuel today (Thursday) by 4:52 pm at the Calabar port. The agent, Kach Maritime, will handle the vessel at the Ecomarine Terminal.
This is despite the announcement of an agreement between the Independent Petroleum Marketers Association of Nigeria, IPMAN, and Dangote Refinery on the direct sale of petrol.
Recall that on October 11, 2024, the Federal Government had also announced that marketers can lift petrol directly from Dangote refinery, which ended the regime of the Nigerian National Petroleum Company Limited as the sole off-taker of the refinery’s petrol.
The Nigeria National Petroleum Company Limited (NNPCL) has announced that crude oil processing has officially begun at the Port Harcourt Refinery in Rivers State.
According to Vanguard, Femi Soneye, the company’s Chief Corporate Communications Officer, shared the update on Tuesday.
Soneye disclosed that the refinery is set to operate at 60 percent capacity, processing 60,000 barrels per day (bpd).
“Today marks a monumental achievement for Nigeria as the Port Harcourt Refinery officially commences crude oil processing. This groundbreaking milestone signifies a new era of energy independence and economic growth for our nation,” Soneye said on Tuesday.
“Hearty congratulations to President Bola Ahmed Tinubu, the NNPC Board, and the exceptional leadership of GCEO Mele Kyari for their unwavering commitment to this transformative project. Together, we are reshaping Nigeria’s energy future!”
Soneye added that truck loading will commence on Tuesday (today), adding that the NNPCL is also “working tirelessly to bring the Warri Refinery back online soon”.
Here are nine completed refineries in Nigeria
1. Edo Refinery and PetroChemical Company:
This project is a wholly owned subsidiary of AIPCC Energy.
It operates in two phases with capacities of 1,000 BPSD and 5,000 BPSD and has been commissioned and is fully operational.
2. Duport Midstream:
Located in Edo State, this is a 2,500-BPD refinery that was completed in 2022 and started production in 2023.
3. Walter Smith refinery:
The Walter Smith refinery is a 5,000-bpd oil refinery located in Imo State. The refinery started operations in 2020, with plans to expand its capacity to 50,000 bpd in the coming years.
4. OPAC Refinery, Delta state:
This 10,000-bpd modular refinery located in Kwale, Delta state was completed in 2021 as part of the federal government’s effort to improve local crude oil refining.
5. Niger Delta Petroleum Refinery (Aradel).
The initial 1,000 bbls/day AGO topping plant was commissioned in 2010. Currently, the 3-train, 11,000 bbls/day modular refinery produces Automotive Gas Oil, Dual Purpose Kerosene, Marine Diesel Oil, High-Pour Fuel Oil, and Naphtha.
6. Old Port-Harcourt refinery:
Built and commissioned in 1965 with a refining capacity of 60,000 barrels of oil per day.
In March 2021, the federal government awarded the repair of the refinery to Tecnimont SPA- an Italian company that would carry out repair works in phases.
In December last year, the Minister of Petroleum Resources, Sen. Keineken Lokpobiri announced the mechanical completion and flare startup of the refinery.
7. Warri Refinery and Petrochemical Company (WRPC):
The 125,000-bpd capacity WRPC was built and commissioned in 1978 at a cost of around $478 million.
The refinery has never achieved full capacity utilization as production has declined steadily except in the early 1990’s, during which there was a brief upswing in production.
In 2021, the federal government awarded the contract for the repair of the decrepit refinery to Saipem SPA at a cost of $897 million.
8. New Port-Harcourt refinery:
In 1985, the federal government commissioned the New Port Harcourt refinery, built at a cost of $850 million. It has the capacity to refine 150,000 barrels of oil daily.
The commissioning of the New Port Harcourt refinery increased the total refining capacity of the plants to 210,000 barrels per day.
9. Dangote Refinery:
This is a 650,000-bpd refinery located in Lekki, Lagos state. The refinery cost around $19 billion and was commissioned in May 2023. Oil refining started in late December 2023, and it started dispensing products to local and international markets as of May 2024.
The Nigeria Navy said its troops of Operation Delta Sanity have deactivated two illegal refining sites with 2 refining ovens, 2 storage tanks, and numerous sacks containing illegally refined AGO in Delta State.
In a statement on its verified Facebook page, it said “On Wednesday 23 October 2024, Nigerian Navy Ship (NNS) DELTA discovered and deactivated 2 illegal refining sites with 2 refining ovens, 2 storage tanks, numerous sacks containing illegally refined AGO and 13 dugout pits laden with an unspecified amount of stolen crude oil in Obodo Omani Community, Warri South-West LGA, Delta State.
“Additionally, NNS DELTA personnel discovered and destroyed an illegal refining site with 2 refining ovens, 3 storage tanks and sacks containing illegally refined AGO in Bennett Island, Warri South-West LGA, Delta State.
A consortium of investors from South Korea has concluded plans to build four 100,000-barrel capacity refineries in various locations in Nigeria, the Federal Government announced on Tuesday.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, stated this at the maiden edition of a summit organised by the Crude Oil Refineries Owners Association of Nigeria in Lagos.
According to him, the Federal Government is encouraging investors to build refineries by providing an open environment for all.
Lokpobiri noted that approval was recently granted to invite the consortium, the name of which he did not mention.
“We encourage investors to build limited refineries by providing an open environment. A recent approval was granted to invite to Nigeria a consortium of investors from South Korea, which intends to establish four 100,000 barrels-model refineries in four different locations in Nigeria.
“We have adopted the public-private partnership model to unlock investment in the midstream and downstream segments of the oil and gas sector, which will lead to the establishment of more modular and mega refineries,” he narrated.
The oil minister said this will yield results because the Federal Government is open to equity investment in modular refineries and other upcoming refineries as a step to ensure energy security.
“The Nigerian Upstream Petroleum Regulatory Commission has developed and published the domestic crude supply obligation guidelines to ensure transparency in the oil industry and ensure access to feedstock by our local refineries.
“In addition, we prioritise and work with stakeholders to ensure effective implementation of the recommendations of the Modular Refinery Committee to give special concession to local refineries’ owners, thereby guaranteeing feedstock to their refineries,” he explained.
He spoke further, “We will ensure the deregulation of the downstream sector is 100 per cent and put in place a necessary framework that will ease the impact on the poor masses.
“The ministry has facilitated easier access to existing tax and other exemptions on refinery equipment importation, which is part of our plan to make Nigeria self-sufficient for petroleum producers and become Africa’s petroleum refining hub.”
Lokpobiri said though the PIA created the petroleum ministry and National Gas Infrastructure Fund, which sources its funds from the sales of petroleum products in-country, the thought of the ministry was that a portion of the fund is used to support infrastructural development for refineries, like in the gas value chain.
“In effect, we will initiate the review of the PIA to enable this. Meanwhile, CORAN as a body should take up the campaign. Through the Petroleum Technology Development Fund and the Nigerian Content Development and Monitoring Board, we are prioritising partnerships with international institutions in knowledge transfer for manpower in refinery operations, and investment in research and development, to support technological advancements and innovation in the refining sector.
“In no distant time, we intend to create the apprenticeship programme in collaboration with existing refineries to develop expertise in our refinery operations,” he disclosed.
In an effort to discourage crude oil theft and illegal refining, he said the ministry had set up an international emergency committee on home-grown solutions to in-country refining.
The Nigerian National Petroleum Company Limited may begin the supply of crude oil in naira to the Dangote Petroleum Refinery this week following the announcement by the Federal Government that the naira-for-crude deal has commenced.
Also, following the promise by the government, three more refineries are getting set to start the production of Premium Motor Spirit, otherwise known as petrol, it was gathered on Sunday.
The three refineries include the 11,000 barrels per day capacity Aradel refinery in Rivers State; 20,000-capacity Clairgold refinery in Delta State; and 12,000-capacity Azikel in Bayelsa.
This came as officials at the $20bn Dangote refinery in Lagos and operators of other domestic refineries confirmed on Sunday that though the deal for crude supply in naira has commenced, the commodity is expected to hit the biggest refinery in Africa this week.
On Saturday the Federal Government said it had commenced the sales of crude oil and other refined products in naira.
The Federal Ministry of Finance disclosed this in a post on its X handle.
The statement read, “The Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council directive, the sale of crude oil and refined petroleum products in naira has officially commenced as of October 1, 2024.
“Following a meeting of the Implementation Committee, chaired by the Minister of Finance on October 3, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders.”
Reacting to this on Sunday, officials at the Dangote refinery commended the move by the government and expressed hope that the commodity would arrive the plant this week barring any unforeseen circumstances.
“The deal is still a work in progress and I’m sure that by this week the committee should be done with it,” an impeccable senior source at the plant who spoke to our correspondent in confidence due to lack of authorisation to speak on the matter, stated.
When probed further to confirm if the crude supplied in naira had arrived at the plant, the official insisted that the deal “is a work in progress, adding that “nobody will say crude has arrived anywhere now.”
The source continued, “As of Friday, discussions about it were still ongoing. But I’m sure there will be a complete picture by this week. However, the whole thing is okay. It is a good signal about the crude oil supply in naira.
“And I can assure you that once the first cargo delivers the crude, I’ll send you a picture of it so that you’ll confirm that the deal has been completed. It is also for record purposes. You should have documents and photographs to show the first supply for such deals, having dates and possibly time of arrival.”
Another source at the plant stated that the naira-for-crude deal would last for six months under the first phase.
“The deal is for six months in the first instance. People shouldn’t think it is forever. This is a dollar-based business, so supplying it in naira though at the equivalent dollar rate is significant. The President should be commended for this.
“Otherwise, the local crude would have been purchased from foreign-based traders who often mark up their prices and this has its effect on the cost of producing refined commodities whether in Nigeria or elsewhere,” the official stated.
Earlier, the Crude Oil Refinery Owners Association of Nigeria and the Petroleum Retail Outlet Owners Association of Nigeria welcomed the announcement of the government on the commencement of the naira-for-crude deal.
They, however, asked the government to provide details about the deal.
“The details of this agreement is not known yet but we hope that the intricacies will be revealed to the public because this business is the central value of everything that happen in our economy. PMS is key and the pricing of the crude is important as it determines the price of the commodity.
“It will be a great thing for us to know the details and its implementation. However, we are happy with the deal and congratulate everyone involved,” the President of PETROAN, Billy Gillis-Harry, had stated.
Last month, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency announced that the Federal Executive Council under the leadership of President Bola Tinubu had approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.
“From October 1, NNPC will commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery to be paid for in naira,” the committee had declared.
The government explained in September that the naira-for-crude initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.
“Since then, the implementation committee chaired by the Minister of Finance and we, the technical committee, have worked intensely with NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the FEC approval,” the finance ministry had stated in a statement.
While stating that crude would be sold to Dangote in naira from October 1, it said, “In return, the Dangote refinery will supply PMS (petrol) and diesel of equivalent value to the domestic market to be paid in naira.
“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.”
But in the finance ministry’s statement on Saturday, the government announced that the deal had commenced. It said this was after a meeting with critical stakeholders involved in the deal.
The statement added that officials at the meeting include the Minister of State, Petroleum (Oil), Heineken Lokpobiri, the Special Adviser to the President on Revenue, Zaccheus Adedeji, the Special Adviser to the President on Energy, Olu Verheijen, and the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed.
Others include the representative of the Chairman of Dangote Group, the Vice President of Dangote Group, and the management of the Nigerian National Petroleum Company, led by the Group Chief Executive Officer, Mele Kyari, Chief Financial Officer, Umar Ajiya, and the NNPC Executive Vice President (Downstream), Adeyemi Adetunji.
Modular refineries
Following the promise by the government on crude supply in naira, three modular refineries are getting set to start the production of petrol.
The three refineries will join the Dangote refinery to produce more petrol for local consumption, ending petrol importation in Nigeria.
Sources informed one of our correspondents about the development and outlined the three refineries to include the 11,000 barrels per day capacity Aradel refinery in Rivers State, the 20,000-capacity Clairgold refinery in Delta State, and the 12,000-capacity Azikel in Bayelsa.
Owners of the three refineries are at various stages of work on their plants, it was gathered on Sunday.
Modular refineries have been producing diesel but are not producing petrol.
From 2015 to 2019, Nigeria could only produce 1.46 billion litres of petrol due to low refining capacity caused by the country’s inactive refineries, the National Bureau of Statistics stated.
The PUNCH observed that the 1.46 billion litres produced within the period was not up to what the country would consume in two months.
From 2020 to 2023, the country only produced diesel and kerosene with the help of modular refineries, as the country’s refineries were moribund.
It was revealed that about 69.71 million litres of kerosene were locally produced in 2023, compared to 44.68 million litres in the previous year, indicating a 56.02 per cent rise.
For diesel, 109.39 million litres were locally produced in 2023, compared to 102.47 million litres reported in 2022, representing a 6.76 per cent growth rate.
Curious about why the local refineries could not produce PMS, experts told our correspondent that each of these refineries would need to be upgraded with an investment of not less than $60m.
“Producing PMS would mean additional equipment – catalytic reformers – which costs about $60m. Most of the owners of these refineries don’t have the resources. The refineries need cash flow to make this additional investment,” an impeccable source stated.
It was gathered that Aradel has started the upgrade of its facility to accommodate the catalytic reformer while Azikel is also leaving no stone unturned.
According to another source, Clairgold refinery is using the isomerisation technology to process petrol production.
It was stated that the isomerisation technology can produce petrol at a cheaper rate than using the catalytic reformer. However, its use and compatibility depend on the configuration of the refinery.
It appears the refineries are eager to commence production of petrol following the decision of the government to sell crude to refineries in the local currency.
The modular refineries, which have suffered crude crisis over the years, felt they may not benefit from the naira-crude sale unless they venture into petrol production.
Aside from this, the seeming deregulation of PMS after the Dangote refinery began the sale of the product to the Nigerian National Petroleum Company Limited, could prompt many others to consider going into PMS production, believing there would be returns on investments when the government stops subsidies.
In a recent interview, the Crude Oil Refinery Owners Association of Nigeria’s spokesman, Eche Idoko, disclosed that many of the modular refineries have been facing serious crude challenges, preventing them from producing fuel.
He noted that some refineries with 10,000 capacity currently produce a little above 3,000 barrels per day due to the unavailability of crude oil.
“A 6,000-capacity refinery now produces 1,000 barrels, but productions are off and on because of erratic crude supply,” he stated.
He added, “Our modular refineries are facing a serious crude crisis. Nothing has changed for modular refineries. There are talks with the government but there hasn’t been any definite arrangement for supplies.”
Dangote petrol
In another development, it was gathered on Sunday that NNPC lifted a total sum of 102.9 million litres of petrol from the Dangote refinery between September 15 and 30, 2024.
This effort aims to alleviate the frustrations of consumers and ensure that adequate fuel is readily available, thereby enhancing the overall efficiency of transportation and economic activities.
Documents obtained from the national oil company on Sunday revealed that the refinery successfully loaded 2,207 out of 3,621 trucks dispatched to it during the review period.
It also showed that the trucks carried only 102,973,025 litres, falling short by 297,026,975 litres of the planned 400,000,000 litres of petrol earmarked to be lifted from the refinery, representing a 25.74 per cent transaction performance.
Recall that the government had stated that the Dangote refinery would supply a total of 25 million litres of petrol to the Nigerian market daily starting from September.
NNPC began lifting petrol from Dangote refinery on September 15 as the sole off-taker of the product from the facility.
The following day, the company announced that it was buying the product from the refinery at N898.78 per litre. A statement by the company said the petrol was lifted from the Dangote Refinery at a price above N1,000 per litre in the far north.
It explained that the price may go for as high as N1,019/litre in places like Borno State, and N999.22 in Abuja, Sokoto, Kano, and others.
In Oyo, Rivers and other areas in the South, it will be N960 per litre. This rate remained the same throughout September.
Although the NNPC said it was to load 16.8 million litres of petrol from the Dangote refinery on the first day of lifting, figures obtained by our correspondent showed that only 56 trucks carrying 2,486,842 litres loaded products from the gentry loading point of the 650,000 barrels per day capacity Dangote Petroleum Refinery.
On September 16, 74 trucks, including ATM Shafa and NNPCL vehicles, loaded 3,342,238 litres, while 98 trucks consisting of NNPCL, AYM Shafa and Conoil loaded 4,468,686 litres, indicating a low performance of product loading.
The 6 Division, Nigerian Army, says its operatives have neutralised two armed vandals involved in illegal oil bunkering during a gun duel and recovered two AK-47 rifles while 18 suspects were arrested across various states in the Niger Delta region.
Also, the Army said the troops destroyed 13 illegal refining sites, seven boats, uncovered eight illegal connection points and impounded over 60,000 litres of stolen products across the region.
The acting Deputy Director, 6 Division Army Public Relations, Lit-Col. Jonah Danjuma disclosed this in a statement issued in Port Harcourt, the Rivers State capital, on Sunday.
Danjuma said the feat followed the Army’s consolidation on the ongoing anti-illegal bunkering operations, saying it had recorded enormous successes in the crude oil and gas-rich region.
The statement read, “In the latest feat recorded, troops neutralised two armed vandals, recovered two AK-47 rifles, arrested 18 suspected oil thieves, destroyed 13 active illegal refining sites, seven boats, discovered 8 illegal connection points and confiscated over 60,000 litres of stolen products across the region.
“Following credible intelligence on a criminal attempt to vandalise the Nigerian Agip Oil Company pipeline, traversing Upatabo Community in Ahoada West Local Government Area of Rivers State, troops swiftly mobilised to the scene.
“On getting to the scene, the criminal elements engaged troops in a firefight. In the gun duel that ensued, troops neutralised two of the criminals, recovered two AK-47 rifles, eight magazines and 69 rounds of 7.62 mm (Special) ammunition, while others fled in disarray. Efforts are ongoing to apprehend the fleeing suspects.
“At Bille in Degema LGA, troops deactivated four illegal refining sites, two wooden boats and handled over 6,000 litres of stolen products. Likewise at Odagba village, at the fringes of Imo River, troops intercepted two wooden boats with over 5,000 litres of stolen products, destroyed one oven and received each within the swampy area of Odagba village.”
The statement further noted, “In Akwa Ibom, troops acting on credible intelligence intercepted six drums of premium motor spirit estimated to be 1,500 litres at Ibaka waterside in Mbo LGA.
“The products were being primed for onward smuggling to a neighbouring country through the waterways. All the persons arrested have been handed over to the prosecuting agency, while products confiscated are handled appropriately in compliance with subsisting mandates in the region.”
The division’s General Officer Commanding, Maj-Gen. Jamal Abdussalam, while commending troops for the successes recorded, reassured all that the division would continue to sustain ongoing operations across the Niger Delta region.
President Bola Tinubu has approved a new directive to promote the trade of crude oil using the local currency.
The Federal Inland Revenue Service (FIRS) Chairman, Zacchaeus Adedeji, disclosed this to State House correspondents on Monday after the federal executive council (FEC) meeting at the Presidential Villa in Abuja on Monday.
According to him, effective immediately, the Nigerian National Petroleum Company (NNPC) Limited will engage with local refineries in transactions dominated in Naira.
He said this move was also extended to the sale of crude oil to Dangote Refinery, with the subsequent sale of Dangote’s products to others also to be conducted in Naira.
He said the decision aimed to mitigate the heavy reliance on foreign exchange for crude oil imports, which currently accounts for roughly 30 to 40 per cent of Nigeria’s forex expenditure.
The FIRS boss further explained that by denominating transactions in Naira, the federal government expected to significantly reduce the forex burden, estimating annual savings of around $7.3 billion.
Adedeji emphasised that the shift will stabilise crude oil prices domestically by minimising the impact of forex fluctuations.
He said the new policy is anticipated to ease the pressure on Nigeria’s foreign exchange reserves, reducing monthly forex expenditure from $50 million to approximately $600 million.
As part of the implementation, Afreximbank has been selected as the pilot settlement bank to facilitate the transactions.
The Air Component of Operation Delta Safe has destroyed 12 illegal refining sites and two reservoirs in Abia and Rivers States.
A statement by NAF’s Director of Public Relations and Information, Air Vice Marshal Edward Gabkwet said its aircraft on 26 July 2024 carried out armed air reconnaissance in Umueze in Abia State which revealed several illegal refining sites situated in many fenced households.
AVM Gabkwet said the information was subsequently relayed to ground troops for further exploitation and necessary action.
The Director added that heading towards Owaza, three illegal refining sites were observed hidden under thick vegetations, which were subsequently destroyed.
He said the crew thereafter, followed the river line down to Komkom and Okoloma in Rivers State, where nine illegal refining sites and two reservoirs were discovered and equally destroyed.
“In total, 12 illegal refining sites and 2 reservoirs were destroyed,” Gabkwet said.
He added the sighting of illegal refining sites in fenced living environments is indicative of the sophistry of the illegal trade that would require other means beyond airstrikes to checkmate.
“Those engaged in these acts, especially in fenced living environments, are again reminded of their danger to human lives and health as well as the environment. Be that as may, armed reconnaissance missions as well as destruction of illegal refining sites will continue unabated until crude oil theft and other forms of economic sabotage are reduced to the barest minimum,” he said.
Owners of local refineries in Nigeria, including the Dangote Petroleum Refinery, say they can help the country stop the importation of refined petroleum products in 18 months if the Federal Government works with their plans.
The refiners, who spoke under the aegis of the Crude Oil Refiners Association of Nigeria, said there are other refineries at different stages of completion to join the 650,000-capacity Dangote Petroleum Refinery.
In an interview, CORAN Publicity Secretary, Eche Idoko, told The PUNCH that the Dangote refinery and others in the country can satisfy the fuel needs of the nation.
Idoko’s comment is coming at a time when the Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority, Farouk Ahmed, said the country would not stop fuel importation to break the Dangote monopoly and ensure energy security.
The CORAN official argued that there was no way the government would tackle rising inflation if it did not address the high cost of fuel, especially by working with the local refiners.
“You can’t tackle inflation if you don’t address the pump price of petroleum products. You cannot say you have a plan to step down inflation and you are not involving the key sectors like the refineries; you have to involve us, let’s work together.
“And CORAN is saying that, in 18 months, if the Nigerian government will work with our programmes and plans, in 18 months, we can stop the importation of petroleum products completely. There are refineries in different stages of completion. In 18 months, we can produce what Nigeria will consume,” he stated.
Idoko said Nigeria has enough crude oil to feed Dangote and other refineries but noted that crude theft has been the major challenge to the upstream oil sector.
“We have the crude oil to feed these refineries and more fields are being licensed by the day. So, there will be crude to feed the refineries. Our production figure is dropping because of the crude that is being stolen daily.
“When we have local refineries, crude theft will be reduced. People steal crude through the pipelines and most of the refineries are located close to some of these fields. What this does is that the crude oil producers will no longer need to pump their crude through the pipelines to the terminal for export.
“The local refineries will just truck from the fields or get a short pipeline or barge from their fields to these places. We are losing heavily because unscrupulous elements are stealing crude from the long pipelines,” Idoko stated.
The CORAN official said the international oil companies are supposed to sell crude oil to local refineries at a price lower than the international price.
He asked the Federal Government to ensure that crude oil is sold in naira and not dollars, saying this would reduce the cost of fuel production and the pressure on the local currency.
He mentioned that ending the importation of fuel would strengthen the naira against the dollar, asking that the IOCs should start selling fuel directly to local refiners instead of referring them to their trading agents in Europe.
The NMDPRA boss had earlier warned that Nigeria could not rely heavily on the Dangote refinery for its fuel supply.
According to him, the refinery had requested the regulator to stop giving import licenses 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 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 that is not good for the market, because of monopoly,” Ahmed stressed.
However, the President of Dangote Group, Aliko Dangote, denied the allegation, wondering how he could be a monopoly when the Nigerian National Petroleum Company Limited is renovating government-owned refineries with $4bn.
Many Nigerians have been calling on the Federal Government to support local refineries and stop the importation of fuel. They expressed hope that this would crash the pump price of petrol and diesel.
Dangote, who has been lamenting over the alleged refusal of the international oil companies to supply crude to his refineries, recently said he would begin the supply of petrol between August 10 and 12.
However, an official of the Dangote Group told our correspondent anonymously that the refinery might export its petrol if the current crude crisis persists.
Shareholders on Dangote
Meanwhile, shareholders have condemned the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, for saying the Dangote refinery was producing diesel with higher sulphur content than imported ones.
The group, under the aegis of Pragmatic Shareholders Association of Nigeria, in a statement signed by their National Coordinator, Mrs Bisi Bakare, expressed dismay over the allegations from the regulator regarding the quality of diesel produced by Dangote.
Bakare commended Dangote for his visionary step in establishing one of the world’s largest refineries. She highlighted Dangote’s commitment to national development, stressing his patriotism and resolute character through substantial investments like the refinery.
“Dangote has ensured that the bulk of his business investments are local, contributing significantly to economic development through tax payments, extensive job creation, and consistent returns for shareholders,” she added.
The group condemned what it termed “unwarranted efforts to demarket the refinery” by regulatory bodies.
It cautioned that such actions could deter both local and international investors and undermine the government’s efforts to stabilise fuel prices and ensure availability.
“We must rally around Dangote refinery to provide crucial support such as crude oil allocation, cooperation from international oil companies, and regulatory agency collaboration,” she noted.
Bakare said the refinery has the potential to save Nigeria over 30 per cent in foreign exchange currently spent on offshore refining, which could significantly alleviate the country’s foreign exchange challenges.
“As shareholders, we remain steadfast in our support of Alhaji Aliko Dangote’s vision to bolster the nation’s economy and create more opportunities for our citizens,” she submitted.
IOCs called out
Last week, the Management of Dangote Group insisted that the IOCs were still frustrating crude supply to the 650,000-capacity refinery.
In a statement, the group alleged that the IOCs insisted on selling crude oil to its refinery through their foreign agents, saying the local price of crude will continue to increase because the trading arms offer cargoes at $2 to $4 per barrel, above NUPRC official price.
The group also alleged that the foreign oil producers seem to be prioritising Asian countries in selling the crude they produce in Nigeria.
The Vice President, Oil & Gas, Dangote Industries Limited, Mr DVG Edwin, said: “If the Domestic Crude Supply Obligation guidelines are diligently implemented, this will ensure that we deal directly with the companies producing the crude oil in Nigeria as stipulated by the Petroleum Industry Act.”
Edwin insisted that IOCs operating in Nigeria have consistently frustrated the company’s requests for locally-produced crude as feedstock for its refining process.
He highlighted that when cargoes are offered to the oil company by the trading arms, it is sometimes at a $2 to $4 (per barrel) premium above the official price set by the Nigerian Upstream Petroleum Regulatory Commission.
“As an example, we paid $96.23 per barrel for a cargo of Bonga crude grade in April (excluding transport). The price consisted of a $90.15 dated Brent price plus a $5.08 NNPC premium plus a $1 trader premium. In the same month, we were able to buy WTI at a dated Brent price of $90.15 + $0.93 trader premium including transport. When the Nigerian National Petroleum Company Limited subsequently lowered its premium based on market feedback that it was too high, some traders then started asking us for a premium of up to $4m over and above the NSP for a cargo of Bonny Light.
“Data on platforms like Platts and Argus shows that the price offered to us is way higher than the market prices tracked by these platforms. We recently had to escalate this to NUPRC,” Edwin said, urging the commission to take a second look at the issue of pricing.
Edwin was reacting to a statement by the Chief Executive of the NUPRC, Gbenga Komolafe, who in an interview on national television said, “It is ‘erroneous’ for one to say that the International Oil Companies are refusing to make crude oil available to domestic refiners, as the Petroleum Industry Act has a stipulation that calls for a willing-buyer, willing-seller relationship.”
While noting that the commission has been very supportive of the Dangote refinery as it has intervened several times to help secure crude supply, Edwin, however, insisted that the NUPRC boss might have been misquoted by some people hence his statement that IOCs did not refuse to sell to us.
Some local refinery operators have lamented that the announcement made by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, stating that the Federal Government would continue to import fuel, shows that the government had taken sides against local refineries.
The operators, under the aegis of the Crude Oil Refiners Association of Nigeria, expressed worry over the recent widely circulated interview of the Chief Executive Officer of NMDPRA, Ahmed Farouk, who was quoted as having described locally produced diesel as ‘inferior’ to imported ones.
It was also reported on Friday that the Federal Government, through the NMDPRA, declared that the importation of refined petroleum products into Nigeria was going to continue alongside the production of commodities by the Dangote Petroleum Refinery to prevent monopoly and ensure energy security.
The government had also warned against being over-dependent on the $20bn refinery located in the Lekki Free Zone in Lagos, stressing that the demand by the refinery that all oil marketers should buy products from the plant does not support competition.
Farouk, who had disclosed this in an interview with journalists in Port Harcourt, the Rivers State capital, was said to have stated that the diesel produced by some local refineries was inferior to the ones imported into Nigeria, a development that perturbed local refiners.
Reacting to the position of the regulator, through their umbrella body, the indigenous crude oil refiners declared that the government had taken sides against local refineries.
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 so as 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 the efforts of indigenous refineries were being discredited by many detractors.
“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.
He 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.
“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.
The NMDPRA boss had, during the interview, revealed that the Dangote refinery, which had been selling diesel and aviation fuel in Nigeria for months, had not been licensed, stating that the plant was still at the pre-commissioning stage.
MOMAN’s reaction
Also, the Executive Secretary of the Major Energy Marketers Association of Nigeria, Clement Isong, described the NMDPRA comments as clear and direct. Isong told our correspondent that the sector needs that kind of information from the regulator.
“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.
No level-playing field – IPMAN
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Ukadike Chinedu, criticised the Nigerian National Petroleum Company Limited, International Oil Companies operating in Nigeria, and NMDPRA for allegedly frustrating indigenous refiners. He said the IOCs and NNPC were not supplying enough crude to the Dangote refinery and modular refineries, adding that the claims against indigenous refiners by NMDPRA were unnecessary.
“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.
Former GMDS meet Kyari
Meanwhile, some former Group Managing Directors of the Nigerian National Petroleum Corporation (now Company Limited) have expressed concern over the limited information on NNPCL’s operations in the public domain since its transition to a private commercial entity. NNPC officially transitioned into a private commercial entity in July 2022 after the Presidential assent on the Petroleum Industry Act in August 2022.
The former GMDs of the national oil firm met with the current Group Chief Executive Officer of NNPC, Mele Kyari, during a CEO forum in Abuja on Saturday. They commended the company for its achievements but raised concerns about its limited public information.
In a communique issued at the end of the forum and signed by a former GMD, Dr Gaius Obaseki, the former NNPC helmsmen said, “We also noted that limited information is in the public domain on NNPC’s operations since the transition to a private commercial entity. This has led to misleading commentary which we believe is not in tandem with the strides achieved by the company.”
The communique listed the former GMDs at the forum to include Chief Chamberlain Oyibo, Dr Gaius Obaseki, Funsho Kupolokun, Abubakar Yar’adua, Austen Oniwon, and Andrew Yakubu.
Dangote refinery eyes 550,000bpd
Dangote Petroleum Refinery will reach 550,000 barrels per day of crude oil refining output this year, the President of the Dangote Group, Aliko Dangote, said on Saturday.
Dangote disclosed this during a tour of the $20bn plant located in the Lekki Free Zone in Lagos State, Reuters reported.
He, however, stated that the refinery would have to increase crude imports due to insufficient domestic supplies.
He said the 650,000bpd-capacity refinery, the largest in Africa, had only received five crude cargoes from the Nigerian National Petroleum Company Limited since it started operating earlier this year, instead of the 15 it expected.
“That is why we went ahead and bought some Brazilian crude, and we also got United States crude. Anytime we go to IOCs, they say go to brokers,” Dangote stated.
- Additional reports: GODFREY GEORGE and DARE OLAWIN