The Minister of State for Petroleum Resources, Heineken Lokpobiri has met in an emergency meeting with key stakeholders in the petroleum industry in the country with the view to avert a looming crisis.
Present at the meeting were the Chairman and Chief Executive Officer (CEO) of Dangote Group, Aliko Dangote, Chief Executive of the NMDPRA, Farouk Ahmed, Chief Executive Officer of the NUPRC, Gbenga Komolafe, and NNPC’s Group Chief Executive Officer, Mele Kyari.
In a statement on his X handle on Monday, Lokpobiri, said he convened a high-level meeting with top executives to address the ongoing issues surrounding the Dangote Refinery.
Lokpobiri, who is the Minister of State for Petroleum Resources, said the meeting was a collaborative effort towards finding sustainable solutions to the challenges affecting the refinery.
According to the statement, the Minister stated that all parties involved demonstrated a strong commitment to proactive problem-solving. And they expressed their gratitude for the leadership and timely intervention provided by the Minister.
He said, “I emphasized the critical importance of cooperation and synergy among all stakeholders to ensure the success and optimal performance of Nigeria’s oil and gas sector. Which is essential for the country’s economic growth and energy security.”
Background to the meeting
Recall that Last month, June, the Vice President, Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, had accused International Oil Companies (IOCs) in Nigeria of doing everything to frustrate the survival of the Dangote Oil Refinery and Petrochemicals.
Edwin had stated that the IOCs are deliberately frustrating the refinery’s efforts to buy local crude. This, the OOCs are doing by jerking up the high premium price above the market price. Thereby forcing Dangote to import crude from countries as far as the United States, with its attendant high costs.
The Vice President who disclosed this while speaking to a group of energy editors at a one-day training programme organized by the Dangote Group at the time. He also lamented the activity of the NMDPRA in granting licences indiscriminately to marketers to import dirty refined products into the country.
However, responding to Edwin’s claim at the time, the NMDPRA stated that there is no dirty fuel being imported into the country. The agency noted that it takes seriously its statutory mandate in ensuring that only quality petroleum products are supplied and consumed in Nigeria.
The NMDPRA explained that the Economic Community of West African States (ECOWAS) Heads of State in 2020 endorsed a declaration adopting the Afri-5 fuel roadmap that requires that certain products have a minimum 50 parts per million (ppm) litres of sulphur.
But last week Wednesday, the Dangote Vice President, insisted that IOCs operating in Nigeria have consistently frustrated the company’s requests for locally produced crude as feedstock for its refining process.
Dangote response came against the background of a statement by the Chief Executive Officer of the NUPRC, Gbenga Komolafe.
Komolafe had, in an interview on ARISE News TV, stated that “it is ‘erroneous’ for one to say that the IOCs are refusing to make crude oil available to domestic refiners. As the Petroleum Industry Act (PIA) has a stipulation that calls for a willing buyer, willing seller relationship.”
But the Dangote VP had stated that IOCs prefer to sell crude to international trading arms, who then sell it at a margin.
He highlighted that when cargoes are offered to the oil company by the trading arms, it is sometimes at a $2-$4 (per barrel) premium. Which is above the official price set by NUPRC.
On his part, the NMDPRA Chief Executive, Farouk Ahmed, had stated that the Dangote refinery is still at the pre-commissioning stage. And, therefore, has not yet been licenced. He said this while speaking to the State House Correspondents last Thursday, in Abuja.
Ahmed, stated as untrue, the allegations raised by the Dangote refinery that its operations are being scuttled owing to a lack of supply of crude oil by IOCs.
He noted that Dangote is requesting that the regulatory suspend or stop all importation of petroleum products. Especially, automotive gas oil (AGO) or jet kero and direct all marketers to the refinery.
While the crisis simmered, the House of Representatives resolved to set up an Ad hoc Committee to investigate the alleged conspiracy by IOCs against the refinery.
The resolution by the House was as a result of a motion of urgent public importance moved by the Minority Leader, Kingsley Chinda, (PDP, Rivers) last Thursday.
In the motion, Hon. Chinda noted the alleged conspiracy undermines the refinery’s performance from complete optimization.
He said, “The alleged conspiracy against Dangote refinery relates to efforts by the IOCs to deliberately frustrate the refinery’s ability to buy local crude oil by manipulating and increasing the premium price above the market price.”
The Minority Leader added that “whilst the IOCs are keen on exporting raw materials to their home countries and thus creating wealth and employment for their countries, thereby adding to their GDP, Nigeria continues to be a dumping ground for refined products, thus making us dependent on imported petroleum products.”
In its resolution, therefore, the House urged the Federal Government, the NUPRC, the Nigeria Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), and well-meaning Nigerians to support Dangote Refinery to succeed.
Following the crisis, the Chairman and Chief Executive Officer (CEO) of Dangote Group, Aliko Dangote announced plans to halt investment in Nigeria’s steel industry.
He stated that his company’s board decided against the steel investment to avoid the accusations of being considered monopolistic.
Dangote also stated his readiness to let the NNPCL to buy over the Dangote refinery.
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