There are strong indications that the Dangote Petroleum Refinery may not roll out petrol on Monday in line with its earlier schedule.
The President, Dangote Group, Alhaji Aliko Dangote, had last month projected that the refinery would begin the production of petrol between August 10 and 12, 2024.
However, findings by media source reveal that the 650,000 barrels per day capacity refinery might not roll out petrol on Monday (today).
But multiple officials close to the development confirmed to media on Sunday that all was set for the refinery to begin the production of the much-awaited Premium Motor Spirit before the end of August.
“All is set. The refinery will roll out petrol this month. However, its concern is that the refinery cannot stop for one minute, it needs the constant supply of crude to keep going,” one of the top officials close the refinery told media on condition of anonymity on Sunday.
However, further findings show that the ongoing crude supply crisis might be a setback to the Dangote oil refinery which is supposed to commence the supply of the much-awaited Premium Motor Spirit, popularly called petrol, into the market today.
This is also as PMS marketers await the sale of the commodity by the refinery this week.
Media source reliably gathered that the refinery has put efforts in top gear to roll out petrol this August, even as it awaits 29 million barrels of crude oil from the Nigerian Upstream Petroleum Regulatory Commission.
Reliable sources privy to the development told our correspondent that the refinery is ready to release petrol this month, regardless of the crude crisis.
The sources, who did not want to be mentioned because of the sensitivity of the matter, disclosed that the company is 100 per cent ready to pump out petrol as planned. However, they said the low supply of crude may impact the process.
“I can confirm to you that we will start the sale of PMS this August, though the low supply of crude oil has always been affecting the process. But from the information at my disposal, we are 100 per cent ready for the supply of PMS,” a source stated.
Another informed person said the refinery is still awaiting 29 million barrels of crude oil from the NUPRC.
“The NUPRC is yet to fulfil the supply of the 29 million barrels promised to Dangote. They are still waiting for that. Surprisingly, the 29 million barrels were allocated on paper, they didn’t get to the refinery, yet the NUPRC told the media on Friday that the crude was supplied.
“Dangote refinery needs 15 cargoes for September, only six cargoes have been supplied. Where do you want him to get the remaining nine cargoes? He will have to import again. Though the President said local refineries should buy in naira, but if it is at the international rate. What is the difference?” she asked.
Our correspondent reliably gathered that though Dangote will roll out the supply of petrol in August, the product may not be sold locally due to price differential.
Experts familiar with the company stated that the current price being offered by the Nigerian National Petroleum Company Limited for petrol is not competitive for any trader.
“For Dangote to sell to Nigerians, it has to be at a competitive rate. Dangote will source crude at the international rate, how do you expect him to sell at a rate below the cost price? So, it will be better to sell outside the country than to sell in Nigeria at a loss.
“There is a lot of politics in oil and gas, and this is heavily killing Nigeria. Just like former President Olusegun Obasanjo said, those making money from fuel importation are frustrating Dangote,” the expert said anonymously.
Some workers of the refinery who spoke reluctantly to our reporter maintained that all was set for the sale of petrol, but they would not know the exact date and the price.
“I learnt PMS will be out probably by next week, but I don’t know the exact date,” one of the workers disclosed, pleading not to be mentioned because he was not authorised to speak to the press.
29 million barrels
Media reports that the Dangote refinery engaged in an exchange of words with the NUPRC over the alleged supply of 29 million barrels of crude oil to the refinery.
The Dangote Group Thursday accused the NUPRC of failing to effectively enforce the Domestic Crude Supply Obligations regulations, saying the refinery had yet to get enough crude locally.
Reacting, the NUPRC debunked the claim, stating that it facilitated the supply of over 29 million barrels of crude oil to Dangote from January to June 2024.
The NUPRC argued that it had facilitated the domestic supply of crude oil to Dangote refinery and other refineries using the monthly production curtailment platform.
“A breakdown shows that nine refineries have benefitted from the 32,088,122 barrels of crude as Dangote alone enjoyed 29,047,098 barrels out of the total supply between January to June 2024.”
According to the commission, the Warri refinery reportedly received 949,670 barrels; NDPR refinery got 823,395 barrels of crude; Port Harcourt refinery received 471,123 barrels; Seplat-WPSOL refinery was allocated 419,541 barrels while Waltersmith-WSPOL refinery got 296,353 barrels.
Other beneficiaries listed include the Edo refinery which got 58,504 barrels of crude and Du-port refinery which got 22,438 barrels of crude.
It added that in the pursuit of its mandate, if it became necessary for licences to be withdrawn, the commission would do so, but it would not resort to the ‘presumptuous and arbitrary’ withdrawal of licences because of the ‘sanctity of contract.’
But in a swift response, the Dangote Group also denied receiving 29 million barrels of crude from any source.
Spokesperson of the Dangote Group, Anthony Chiejina, had said, “We receive NUPRC’s statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals, we would like to thank them for this allocation but at the same time, we wish to let them know that we are yet to receive these cargoes.
“Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.”
Chiejina added that all the refinery was asking for was for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen.
“Unfortunately, the NUPRC has effectively admitted in their statement that they will be unable to enforce the domestic crude supply obligation as specified in the PIA, citing ‘sanctity of contracts’ as an excuse,” Chiejina stated.
In a chat on Sunday, the NUPRC spokesperson, Olaide Shonola, told our correspondent that the commission was looking into the claims by the refinery that the allocated 29 million barrels were not received.
“We are looking into this,” Shonola said, promising to revert later.
As August progresses, Nigerians are beginning to ask whether or not the Dangote refinery will be able to supply petrol this month as promised by the President of the Dangote Group, Alhaji Aliko Dangote.
The worries of many Nigerians stemmed from the crude shortage crisis that has been rocking the facility since it commenced operations a few months ago.
Media recalls that Dangote had to postpone the supply of PMS like three times since the refinery began the sale of diesel and aviation fuel in April.
In May, Dangote told Nigerians that fuel importation would completely stop in Nigeria the moment the refinery began the sale of petrol in June.
During the Africa CEO Summit in Rwanda, Dangote promised that the refinery would put an end to the monthly importation of an average of one billion litres of PMS in Nigeria from June.
According to him, following the laid-down plans of the Dangote refinery, Nigeria will no longer need to import petrol starting in June.
He said, “Right now, Nigeria has no cause to import anything apart from gasoline (petrol) and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.
“We have enough gasoline to give to at least the entire West Africa; and diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.
“We have started producing jet fuel, we are producing diesel, and by next month (June), we’ll be producing gasoline. What that will do is that it will be able to take most African crude.”
In June, Dangote informed Nigerians that his plan to release petrol into the market in the sixth month of the year would no longer be possible, sparking reactions from Nigerians.
While on a tour of the facility with Governor Babajide Sanwo-Olu of Lagos State and other dignitaries, he announced, “We had a bit of delay, but PMS will start coming out by 10 to 15 of July. But then, we want to keep it in the tank to make sure that it settles. So, by the third week of July, we’ll be able to come out to take it into the market,” Dangote had said.
However, this could not happen in July as Dangote again told pressmen that the supply of petrol was impacted by a fire incident that broke out at the refinery’s effluent treatment plant on June 26. He said the product would be out between August 12 and 15.
Marketers await Dangote
Meanwhile, petroleum marketers in Nigeria said they are still waiting to hear from the refinery on when it would begin the release of petrol.
Both major and independent marketers showed interest in buying PMS from Dangote, especially after years of depending on the Nigerian National Petroleum Company Limited for petrol.
The Executive Secretary of the Major Energies Marketers Association of Nigeria, Clement Isong, told media on Sunday that the major marketers are waiting to hear from the Dangote Group.
According to him, MEMAN members are currently buying PMS from the NNPC while most of them get diesel and aviation fuel from the Dangote refinery.
“We are still waiting for them. Currently, it is only the NNPC that imports PMS because of the price differential. So, we are waiting (for Dangote refinery).
“Currently, we are all buying AGO (diesel) and ATK (aviation fuel) from the Dangote refinery. To the best of my knowledge, marketers are not buying PMS yet,” Isong stated.
Crude crisis
Media recalls that the management of the Dangote Group had alleged that the International Oil Companies were still frustrating crude supply to the 650,000-capacity refinery.
The group said 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’s official price.
It also alleged that the foreign oil producers seem to be prioritising Asian countries in selling the crude they produce in Nigeria.
The Vice President of Oil & Gas, Dangote Industries Limited, Mr Devakumar Edwin, had 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 were offered to the oil company by the trading arms, it was sometimes at a $2 to $4 (per barrel) premium above the official price set by the Nigerian Upstream Petroleum Regulatory Commission.
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.”
The Chief Executive of Nigerian NMDPRA, Farouk Ahmed, had also debunked the claim by the Dangote official, saying Nigeria could not rely heavily on the Dangote refinery for its fuel supply.
Ahmed had also alleged that Dangote diesel had a higher sulphur content than the ones imported into the country.
But the President of the Dangote Group, Aliko Dangote, had denied the allegation, wondering how he could be a monopoly when the Nigerian National Petroleum Company Limited was renovating government-owned refineries with $4bn.
President Bola Tinubu has since ordered the NNPC to sell crude oil to Dangote in naira.
Hasten crude supply
Oil marketers who weighed into the matter called on the NNPC and the International Oil Companies to hasten up the process of crude oil supply to local refineries both in naira and adequate volumes.
Reacting to the claim by Dangote and other domestic refiners that they had yet to get crude both in naira and as required, the National Publicity Secretary, Chief Ukadike Chinedu, said, “I think the NNPC is on top of this matter.
“However, I must state that they need to expedite action to ensure that crude oil is sent to the refineries. But you need to understand that the process of getting something from the government does not happen easily, some processes must be followed.
“While we admit that there are processes, we are advising those implementing these processes to hasten it up so that the refineries will start refining as quickly as possible and bring down the costs of these petroleum products which have remained a burden on Nigerians.
“It is not sensible that we are an oil-producing country and refined products are still high in our nation, and we are still importing from other refineries when we have refineries in Nigeria. We have to act and it has to be fast.”
Also speaking on the matter, the National Operations Controller of IPMAN, Mustapha Zarma, called on NNPC and IOCs to strive to supply crude oil to domestic refineries both in naira and the required volumes.
This, he said, was because of the enormous gain that the domestic supply of crude oil would have on the local currency and the Nigerian economy.
“The directive of Mr President on the supply of crude oil to Dangote and other local refineries is a welcome development and will help the naira appreciate. This is because most of the demand for forex comes from the petroleum sector.
“So if the refineries get crude oil in naira, I believe that there won’t be much pressure again on the naira. It is a welcome development that should be implemented by the oil producing companies and NNPC.
“Also, they must strive to ensure the supply. Of course, this may not be immediate considering the processes that it may require but the fact is that it should be given the necessary speed to save our local currency from further depreciation,” Zarma stated.
Curled from PUNCH
