Marketers accuse Dangote of selling dirty diesel, NMDPRA of attempted monopoly
…As NMDPRA insists imported diesel meets regulatory standards
By Esther Agbo and Afolabi Ifeoluwakitan
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 criticised Dangote of selling dirty diesel and the NMDPRA of an attempted monopoly in the downstream sector.
The downstream sector in Nigeria deregulated with different players in the value chain.
In a statement made available to NewsDirect, DAPPMAN emphasised 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had initially opposed the practice of ship-to-ship transfers of fuel imports offshore Lome, a decision that was later rescinded following protests from downstream operators.
Narrating its ordeal, the marketers 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 favour 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 licences 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,” it said.
Moreover, DAPPMAN criticised 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.
Likewise, the NMDPRA has reacted to the accusations by Dangote.
Recall that Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL) criticised the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for what he described as the indiscriminate granting of licences to marketers to import substandard refined products into the country.
Reacting to Edwin’s allegations, the NMDPRA in a response to NewsDirect’s enquiry made since Sunday insisted that all imported diesel meets regulatory standards.
In a response signed by George Ene-Ita, the Authority expressed its commitment to regulating the quality of petroleum products consumed in Nigeria as mandated by Section 32 of the Petroleum Industry Act (PIA) 2021.
The statement partly reads, “The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is statutory mandated (Section 32 of the Petroleum Industry Act 2021) to regulate the quality of all petroleum products consumed in Nigeria and ensure that these products meet stipulated standards.”
NMDPRA however detailed Nigeria’s adherence to the ECOWAS Heads of States’ declaration of February 2020, which adopted the AFRI-5 Fuels roadmap. This roadmap stipulates that imported Automotive Gas Oil (AGO) should contain a maximum of 50 parts per million (ppm) of sulfur. Although the full implementation of this requirement was deferred to December 31, 2024, to allow regional refineries time to upgrade their processing plants, the NMDPRA has already made significant progress in reducing sulfur content in imported diesel.
“Nigeria is a signatory to the ECOWAS Heads of States’ declaration of February 2020 that adopted AFRI-5 Fuels roadmap which requires that imported AGO should have a maximum 50 parts per million (50ppm) litres of Sulphur content. The declaration however deferred this requirement up to 31st December 2024 for refineries within the sub-region, thereby allowing sufficient time for processing plants to be upgraded.
“Section 317 of the PIA upholds the AFRI-5 specification. However, it’s full implementation as dictated by the PIA has been guided by the overarching need to maintain stability in domestic supply and pricing during the transition.”
“Since February 2024, NMDPRA has effectively ensured the compliance and enforcement of the Sulphur specification that has reflected a steady downward trend in the sulphur content of imported AGO from an average of 173.9ppm in February to as low as 18.2 in June 2024. And there is every reason to be optimistic that this trend will continue going forward including when our domestic refineries fully operationalize the AFRI-5 template from January 2025.”
The NMDPRA concluded by reiterating its dedication to maintaining a level playing field for all market participants and ensuring that only products meeting the specified standards are consumed in Nigeria. The authority underscored its efforts to safeguard the health and well-being of Nigerians by enforcing these quality standards in full compliance with the PIA.
“NMDPRA continues to collaborate with all stakeholders in ensuring a level playing field for all players, and that only Petroleum products which meet specifications are consumed in Nigeria in full compliance with the PIA with a view to safeguarding the overall health and well-being of Nigerians.”
Also reacting, Executive Director, Distribution Systems, Storage and Retailing Infrastructure, NMDPRA, Ogbugo Ukoha, who addressed journalists, following a meeting with oil marketers and local refiners in Abuja on Tuesday, stated that the authority has continued to ensure that only safe products are brought into the country.
According to him, “The ECOWAS heads of state in 2020 endorsed a declaration adopting the fuel roadmap that requires that certain products have a minimum of 50 parts per million litres of sulphur. “
He added that while it encourages almost immediate enforcement against imports to comply with that standard, the same treaty deferred enforcement for local refineries up to 31 December 2024.
“Now the PIA when it was passed in 2021 in section 317 also captured and upheld this ECOWAS treaty. So, as an authority, what have we done since we came into being? We started by engendering compliance.
“We saw a downward trend up to 2023 December. In December and January of this year, we noticed a spike in the sulphur contents of products being imported. And we again now began strong enforcement from 1 February.
“I am happy to tell Nigerians that up until we speak in June, the average sulphur content in every AGO that is brought into Nigeria is far below, the average is far below the 50 parts per million litres as provided in the law,” he said.
Ukoha noted that the average sulphur content in every automotive gas oil that is brought into Nigeria is far below the 50 parts per million (ppm) litres as provided in the law.
He explained that the local refineries had however continued to produce at a higher level of sulphur.
“But we are not very anxious about that because even the new refineries that are coming in have within their design of the plant desulphurization units that will see in the nearest future that sulphur going down as low as 10 ppm.
“NMDPRA takes very seriously its statutory mandate to ensure that only quality petroleum products are supplied within and consumed in Nigeria.
“And so I would like to assure Nigerians that this is a mandate that the authority takes very seriously and that we are here to guarantee the well-being and health of Nigerians. And there is no dirty fuel that we would encourage to come into Nigeria,” he said.
Ukoha noted that the meeting with the marketers, and refiners was aimed to promote collaboration in a manner that ensures and guarantees energy security within the country.
“Our discussions covered considerable issues, very significant and profound. Issues of pricing, and competition have been raised and we’ll continue to engage with every operator to see that we land at a place that is ultimately beneficial to Nigeria and Nigerians,” he said.
Recall that the Vice President, Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin over the weekend said that the decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in granting licences 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.
