Nigeria launches investigation into fuel imports amid Dangote refinery dispute

On Monday, Nigerian lawmakers established a committee to investigate crude shortages affecting local refineries and the importation of substandard fuels. This inquiry is central to a conflict between the Dangote Refinery and Nigeria's downstream oil regulator.

Tajudeen Abbas

The newly formed committee, created by Nigeria's lower parliament, will examine allegations of importing lower-quality fuels, evaluate the operations of standards agencies, and investigate why refineries, including the Dangote Refinery, are struggling to secure adequate crude supplies. The investigation will also address the issue of rising fuel queues.

"Our investigation will proceed in phases, starting with the allegations of production and importation of substandard petroleum products and the unavailability of crude oil for domestic refineries," stated Ikenga Ugochinyere, co-chair of the committee.

The investigative panel, which does not have the authority to act on its findings, will present its results to parliament, from which recommendations will be made to the president.

The $20 billion Dangote Oil Refinery, constructed by Africa's richest man Aliko Dangote on the outskirts of Lagos, began operations in January but has struggled to obtain sufficient crude supplies from Nigeria. Issues such as vandalism, sabotage, and low investments have hindered production.

Last month, the Dangote Refinery accused oil majors of blocking its access to locally produced crude. It also claimed that the regulator was permitting fuel traders to import high-sulphur gasoil, thereby undermining its operations.

In response, the head of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that the Dangote Refinery was only 45% complete and thus unable to meet the country's needs. He also noted that the gasoil processed by the refinery had a sulphur content between 650 to 1200 parts per million (ppm), making it inferior to imported products. Nigerian regulations allow for a sulphur content of about 50 ppm in gasoil, with enforcement set to begin next year.

During a visit to the plant by some lawmakers on Saturday, Aliko Dangote insisted on testing the gasoil from his refinery against others sold in the local market. The results showed that the Dangote Refinery's diesel had a sulphur content of 87.6 ppm, whereas the other two samples had sulphur levels exceeding 1800 ppm and 2000 ppm, respectively.

Additionally, Dangote announced that he was abandoning his planned investment in steel production in Nigeria due to accusations of seeking a monopoly.

The investigative panel has declared its intention to conduct a forensic audit of the entire sector. "The committee is urging stakeholders in the current dispute to de-escalate tensions as the committee embarks on the significant task of resolving the issue," Ugochinyere said.