The Dangote Refinery and Petrochemicals Company is currently operating without a valid license from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
This revelation was made by the Authority Chief Executive, Mr. Farouk Ahmed, during an interview in Abuja.
Ahmed refuted claims by Dangote Refinery that their operations were being hindered by a lack of crude oil supply from International Oil Companies (IOCs). He clarified that the refinery is far from being ready for full operation, with only about 45% of the project completed, contrary to the statements made by Aliko Dangote, the company’s Chief Executive.
An operating license is a crucial document issued by regulatory authorities, allowing a company to function legally within specific parameters. Without this license, Dangote Refinery’s operations are considered illegal.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, had accused IOCs of refusing to sell crude oil to their refinery, forcing the company to purchase crude at $6 above the market price. Edwin suggested that the IOCs were attempting to undermine the refinery’s success.
These claims are countered by Section 109 of the Petroleum Industry Act (PIA), which mandates that crude oil sales to refineries must be commercially viable, adhering to a “willing buyer and willing seller” principle that prevents losses for the seller. The law requires that crude oil supplies be negotiated at prevailing international market prices and paid for in US dollars or Naira as agreed.
Ahmed emphasized that relying on a single refinery for national petroleum supply is impractical and potentially harmful. Dangote Refinery’s request to halt all importation of petroleum products and direct all marketers to their facility poses significant risks to national energy security and could create a monopoly.
Moreover, Ahmed highlighted concerns about the quality of products from Dangote Refinery. While West African standards require diesel (AGO) to have sulfur content as low as 50 parts per million (ppm), Dangote’s products reportedly range between 650 to 1,200 ppm, making them significantly inferior to imported alternatives.
In conclusion, the NMDPRA Chief underscored the importance of diversified and regulated petroleum supply sources to ensure both quality and energy security for the nation.
