NMDPRA accuses Dangote of market monopoly schemes

• Says Dangote Refinery produces dirty diesel

Sopuruchi Onwuka

Federal government has finally come out openly to condemn alleged plots by Dangote Refinery to impose monopoly on the domestic fuel market, saying the company’s promoters are calling for total ban on other suppliers of the automotive gas oil (AGO) also called diesel in the market.

The market regulator also stated that all diesel local refineries in the country, including the Dangote Refinery, produce dirty diesel; inferring strongly that  all the local refineries are not optimized enough to produce premium products.

The Authority Chief Executive (ACE) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), Farouk Ahmed, told media representatives in Abuja that Dangote Refinery is still at pre-commissioning stage and yet to be licensed by the regulator until fully technically certified.

 And with its current completion stage and quality of its products, Farouk said, it would be wrong for Dangote to request government to compel all marketers to buy its products.

The Oracle Today reports that industry analysts had at a press webinar hosted by the Major Energy Marketers Association of Nigeria (MEMAN) called on government to be wary of transitioning the market from current public sector monopoly to private sector monopoly, saying that it would drain investment incentives in the midstream petroleum industry.

They also called for establishment of electronic platforms that are visible to all stakeholders as a necessary tool for enhanced transparency and guide to investors wishing to take positions in the Nigerian downstream petroleum industry.

The reactions from both the market players and government regulators are coming in response to a slew of media onslaughts launched by Dangote’s protégées against all oil producers, traders and regulators in the Nigerian petroleum industry accusing them of sabotaging the operations of the offshore refinery which is built in a tax free zone.

Industry voices rising against the high wave of media offensive from Dangote Refinery have pointed out that the antics of the newest foreign entrant into the local market is threatening to destabilize the entire industry and create a monopoly that would kill off other investors in the midstream and downstream sectors of the industry.

They pointed at Dangote’s accusation of other players of importing dirty diesel into the country as a joke, wondering why the new company also wants to become a regulator in the industry.

The Oracle Today reports that the Dangote Refinery started pushing out diesel from the plant in the first half of the year, and the Nigerian downstream petroleum market actually started receiving products in 1957.

Marketers that spoke with our correspondents noted that there has been no notable bad diesel incident of machinery breakdown recorded in the country to justify the dirty diesel alarm raised by Dangote.

Marketers are alarmed that the media attacks launched by Dangote might be targeted at bringing monopoly into the petroleum market where a lot of players have licensed to take positions along the supply chain.

In clarifying issues after a long period of silence, the NMDPRA ACE stated that the allegations of sabotage from Dangote are schemed to enthrone monopoly for his refinery which, he pointed out is still 45 percent completed and unlicensed to operate.

He made it clear that the Dangote Refinery is still at pre-commissioning stage and unable to meet demands for standard quality of products at its current stage.

Farouk disclosed that  Dangote Refinery wants the NMDPRA to cancel all import licenses, stop traders from further importation of diesel and and direct all marketers to patronize its refinery for products.

“This is not good for the nation in terms of energy security and it is also not good for the market because of monopoly.”

Farouk also made it clear that the quality of diesel from Dangote Refinery currently is currently very sour with high sulphur content and falls below the West African requirement of 500 PPM sulphur content proportion.

He stated that diesel produced by different local refineries in the country is inferior to imported ones, clarifying that diesel from Dangote Refinery and others in the country range from 650 to 1200 PPM of sulphur content.

“About the concerns about supply of petroleum products nationwide and claims by some media houses that we are trying to scuttle Dangote Refinery, that is not so. Dangote Refinery is still in pre-commissioning stage. We have not licensed it. I think they about 45 percent completed.

“So, we cannot rely heavily on one refinery to feed the nation because Dangote is requesting that we suspend or stop all importation of especially AGO and jet kero and direct all marketers to the refinery. That is not good for the nation in terms of energy security; and that is not good for the market because of monopoly.

“In terms of quality, their AGO  quality in terms of sulphur is the lowest in terms of West Africa’s requirement of 50 ppm. Dangote Refinery well as other refineries like Waltersmith Refinery, Aradel Refinery, they produce between 650 to 1200 ppm.

 “So in terms of quality, their quality is much more inferior to imported quality,” the regulator clarified.

In the press webinar by on Tuesday, players in the fuel market called for level playing ground for everyone to seek investment opportunity as a way of deepening the market and expanding investment opportunities for the country.