The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has raised concerns about the quality of petroleum products from the Dangote Refinery, as well as those from Watersmith, Aradel, and other modular refineries.
According to NMDPRA, these domestic products are inferior compared to imported ones.
The Chief Executive Officer of the NMDPRA, Farouk Ahmed, disclosed while speaking to state correspondents on Thursday in Abuja.
Ahmed said that the Dangote Refinery, which has a capacity of 650,000 barrels per day, is still in the pre-commissioning stage and about 45% complete.
He emphasised that the refinery had not yet been issued an operational license by the regulatory body.
He said: “Dangote Refinery is still in the pre-commissioning stage. It has not been licensed yet.
“We haven’t licensed them yet. I think they are about 45 per cent to completion.
“We cannot rely on one refinery to feed the nation, because Dangote is requesting that we suspend or stop imports, especially of AGO and DPK, and direct all marketers to his refinery.
“That is not good for the nation in terms of energy security, and it is not good for the market because of the monopoly.”
Addressing rumours of attempts to undermine the Dangote Refinery, Ahmed denied any such actions, clarifying that the refinery is still not operational.
He underscored that the country could afford to suspend the importation of petroleum products, especially Automotive Gas Oil (AGO) and Dual Purpose Kerosene (DPK), based on Dangote’s request.
He added, “Dangote Refinery, as well as some modular refineries like Watersmith Refinery and Aradel Refinery, are producing between 650 and 1,200 PPM.
“Therefore, in terms of quality, their products are inferior to imported ones.”
He warned that such a move would jeopardize the nation’s energy security and create a monopoly in the market.
Ahmed pointed out significant issues with the quality of the refinery’s output.
He stated that Dangote’s current AGO has a sulfur content far exceeding the West African requirement of 50 parts per million (PPM), with levels ranging between 650 and 1,200 PPM.
This, according to him, makes the products from Dangote Refinery, as well as those from some modular refineries like Watersmith and Aradel, inferior to imported alternatives.
Recently, Vice President of Dangote Industries Limited, Devakumar Edwin, accused international oil companies of hindering the refinery’s launch by selling crude oil at inflated prices in Nigeria and suggested that many imported fuel products were substandard.
Speaking at a session with Energy Editors during a one-day training program organized by the Dangote Group, Edwin detailed the challenges faced by their refinery.
“The IOCs are intentionally obstructing the refinery’s efforts to purchase local crude by inflating premium prices above market rates,” Edwin asserted.
He explained that these inflated prices forced the refinery to seek crude from distant sources like the United States, significantly driving up production costs.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is supportive and tries to allocate local crude for us, the IOCs are deliberately frustrating our efforts,” Edwin stated.
He highlighted recent efforts by the NUPRC to enforce the Domestic Crude Oil Supply Obligations (DCSO) under the Petroleum Industry Act (PIA), which aim to ensure fair access to domestic crude oil.
“It is either they demand ridiculous premiums or claim crude is unavailable,” Edwin continued, visibly concerned.
“At times, we have paid premiums as high as $6 above market rates.”
Edwin, who did not name specific IOCs, emphasised that these tactics have compelled the refinery to reduce its output and resort to importing crude from distant countries, adversely impacting their cost structure and operational efficiency.