Nigeria probes fuel imports after Dangote rift with regulator

Lagos— Nigerian legislators on Monday set up a committee to investigate crude shortages to local refineries and importation of dirty fuels, issues at the heart of a rift between the Dangote Refinery and Nigeria’s downstream oil regulator.

The committee constituted by Nigeria’s lower parliament will investigate alleged importation of dirtier fuels, operations of standards agencies, why refineries including Dangote Refinery are unable to get adequate crude supplies and rising fuel queues.

“Our investigation will proceed in phases beginning with the allegation of production and importation of substandard petroleum products and unavailability of crude oil to domestic refineries,” said Ikenga Ugochinyere, a co-chair of the committee.

The findings of the investigative panel, which does not have the power to act on them, will be presented to parliament from which recommendations would be made to the president.

The $20bn Dangote oil refinery, built by Africa’s richest man Aliko Dangote on the outskirts of Lagos, began operations in January but has been unable to get adequate crude supplies from Nigeria where vandalism, sabotage and low investments deter production.

Last month, the Dangote Refinery said oil majors were blocking its access to locally produced crude and the regulator was allowing fuel traders import high-sulphur gas oil thereby undermining its refinery.

In response, the head of the Nigeria Midstream and Downstream Petroleum Regulatory Authority, the downstream regulator, said the Dangote Refinery was 45% completed hence unable to meet the country’s needs. He also said gas oil processed by the refinery is between 650 to 1200 parts per million of sulphur, thus inferior to imported products.

Nigerian regulation allows for the sulphur content in gas oil to be about 50 ppm and is set to begin enforcing the standards from next year.

When some legislators visited the plant on Saturday, Africa’s richest man, Aliko Dangote insisted on a test of the gas oil from his plant with others sold in the local market. The result showed that Dangote Refinery’s diesel had a sulphur content of 87.6 ppm, whereas the other two samples showed sulphur levels exceeding 1,800 ppm and 2,000 ppm, respectively. Dangote announced he was no longer proceeding with an investment into steel production in Nigeria due to allegations that he was seeking to be a monopoly.

The investigative panel said it would 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 great task of resolving the issue,” Ugochinyere said.

Reuters