Nigerian Crude Oil Refiners Back Dangote Over Activities of IOCs

The Crude Oil Refineries Association of Nigeria (CORAN) has backed the Dangote Oil Refinery and Petrochemicals Limited, stressing that the consumers can only purchase petroleum products if refineries in the country are made to function.

The group, speaking Tuesday on Channels Television Business Morning through its chairman, Mr. Momoh Jimah Oyarekhua, corroborated claims by Dangote Refinery that some international oil corporations (IOCs) were actively obstructing the refinery’s operations by refusing to guarantee and provide crude supply.

The Vice President, Oil and Gas at Dangote Industries Limited, Mr. Devakumar Edwin, had accused the IOCs of inflating prices of local crude oil, and making it prohibitively expensive for the Dangote Refinery to purchase in Nigeria.

He also expressed concern over the continued issuance of import licenses to marketers by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), enabling them to bring contaminated refined products into Nigeria.

“It is good to note that more than 3.5 billion litres, representing 90 per cent of our production, have been exported since we started operations,” Edwin stated, appealing to the federal government and regulators to support the Refinery in creating jobs and prosperity for the nation.

Reacting to this, Oyarekhua said, “I will take it from the angle of producers of crude rather than focusing on the IOCs alone. What we usually call IOCS are the international producers, but I do not think it is just about the international producers and operators in Nigeria, I think it’s more about the producers of crude in Nigeria that are perhaps frustrating the refineries in Nigeria from getting crude.

“In fact, we have been on this journey. I particularly have been on this journey of advocating for crude sales to local refineries and also where necessary for the modular refineries for crude to be sold to them in naira because most of our products are produced into the local market and income is actually in Naira and it is just commonsensical that if you sell product in naira you should be able to get your feedstock in naira, mostly when that feedstock is produced in naira so that you don’t put pressure on the US dollar that is already scarce in the country.

“We have had several engagements with the NUPRC and all of that and it is clear that in the PIA Law, in Section 109, there is DCSO which is supposed to be Domestic Crude Supply Obligation to support the local refineries and I think that law was specifically put there by legislators not to starve the refineries. But what we have seen is a huge and still resistance by the producers of crude in Nigeria. They will rather prefer to export crude abroad than to sell to local refineries.”

CORAN Chairman insisted that the cost of finished products would reduce drastically if local refining is encouraged, instead of the importation of finished refined products that do not even meet quality standards.

“We all saw that when Dangote came on stream, diesel dropped from N1,600 to about N1,200, and as we speak today, from our refineries, we are even selling less than N1,100. This is to tell you how far producing crude locally can support the economy and can support the people of Nigeria,” Oyarekhua said.