Dangote Refinery sells at higher price to local buyers compare to international buyers – Marketers
…Refutes Dangote Refinery claims on NMDPRA of granting licences to import dirty fuel importation
By Afolabi Ifeoluwakitan and Esther Agbo
Following the claim by Dangote Industries Limited (DIL), that Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is granting licences to import banned diesel, aviation fuel, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has strongly refute the recent claims.
This is even as DAPPMAN criticized Dangote Refinery’s business practices, alleging that the company sells fuel at lower prices to international buyers compared to local Nigerian buyers.
In a statement made available to NewsDirect, DAPPMAN emphasized that none of its members, nor any private fuel depot in Nigeria has imported fuel outside the specifications approved by the NMDPRA. As they described the assertions from Dangote Refinery’s management as inaccurate and misleading.
DAPPMAN highlighted that the NMDPRA had initially opposed the practice of ship-to-ship transfers of fuel imports offshore Lome, a decision that was later rescinded following protests from downstream operators.
Also noted regulatory changes that occurred between February and May 2024, which allowed the importation of Automotive Gas Oil (AGO) with a maximum sulphur content of 200 parts per million (ppm).
However, in June 2024, the NMDPRA moved the implementation date for the stricter 50 ppm sulphur limit on petrol and diesel imports to 1st June 2024, a decision seen as an attempt to favor Dangote Refinery, hence, effectively restricted all marketers and depots to sourcing AGO from Dangote Refinery, even though the refinery had not yet installed its desulphurization equipment, resulting in AGO blends with sulphur levels exceeding 50 ppm.
DAPPMAN opposed this in a letter to the NMDPRA on June 10, 2024, cautioning the regulator against unintentionally fostering a monopoly in the sector. Despite strong resistance to every attempt to create a monopoly for Dangote Refinery in the downstream market, and considering that the refinery’s recent AGO production has sulphur levels of 1200 ppm.
DAPPMAN finds it perplexing that Dangote Industries would claim the NMDPRA is issuing licenses for the importation of ‘dirty refined products.’
Their AGO blend, with its high sulphur content, is classified as ‘dirty fuel,’ far exceeding the 200 ppm limit adhered to by other marketers and depot owners.
Moreover, DAPPMAN criticized Dangote Refinery’s business practices, alleging that the company sells fuel at lower prices to international buyers compared to local Nigerian buyers.
This pricing strategy, DAPPMAN argued, undermines Nigerian marketers and questions Dangote Refinery’s commitment to the nation’s interests.
Recently, several Nigerian marketers were offered Dangote Refinery cargoes by international trading firms at significantly lower prices than those directly offered by Dangote Refinery, which is not beneficial for Nigerian fuel consumers.
While the success of Dangote Refinery would be a national achievement, it is crucial that all downstream operators comply with the Petroleum Industry Act 2021, which opposes any form of monopoly.
DAPPMAN concluded its statement by reiterating its willingness to collaborate with all stakeholders, including Dangote Refinery, to ensure the provision of safe and affordable fuel to Nigerians, in compliance with the Petroleum Industry Act of 2021, which opposes monopolistic practices.
Recall that the Vice President, Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin during the weekend said that the decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in granting licenses indiscriminately for the importation of dirty diesel and aviation fuel has made the Dangote refinery to expand into foreign markets.
The refinery has recently exported diesel and aviation fuel to Europe and other parts of the world.
The same industry players fought us for crashing the price of diesel and aviation fuel, but our aim, as I have said earlier, is to grow our economy,” Edwin stated.
