Dangote Accuses IOCs: Undermining Africa’s Largest Refinery

iexclusivenews – In a startling revelation, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), has accused International Oil Companies (IOCs) operating in Nigeria of actively undermining the Dangote Oil Refinery and Petrochemicals.

Edwin’s disclosure came during an exclusive session with Energy Editors at a one-day training program organized by the Dangote Group.

Price Manipulation and Crude Obstruction

Edwin pointed out that IOCs deliberately obstruct the refinery’s efforts to procure local crude oil. How?

By inflating premium prices above market rates, forcing the refinery to import crude from distant countries like the United States.

The result? Skyrocketing costs for Dangote’s ambitious refinery project.

While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) strives to allocate local crude,

IOCs persistently frustrate these efforts. Edwin emphasized that IOCs either demand exorbitant premiums or claim crude availability issues.

At times, Dangote’s team paid a staggering $6 per barrel above market price, impacting production output and necessitating costly imports.

READ MORE: Dangote Refinery Postpones Petrol Production to Mid-July

FG Frowns at Dangote Refinery’s Crude Oil Imports See Why

Legal Mandates and Refinery Survival

The Petroleum Industry Act (PIA), signed during President Buhari’s administration, mandates international oil companies to prioritize local demands.

Before exporting, IOCs must supply crude oil to Nigerian refineries. Recently reinstated by the NUPRC, this regulation aims to ensure fair distribution.

NUPRC acts as a mediator between local refiners and producers, facilitating sales agreements based on a willing-buyer, willing-seller model.

However, Aliko Dangote, chairman and president of the Dangote refinery, revealed in a CNN interview that some IOCs defy this mandate, refusing to sell them crude for processing. The battle continues.

Africa’s Energy Hub: The Dangote Refinery

Situated in Lagos, Nigeria, the Dangote refinery stands as Africa and Europe’s largest petroleum refinery.

With a remarkable refining capacity of 650,000 barrels, it not only supplies Nigeria but also other African nations heavily reliant on European energy sources.

Recent reports indicate that the $20 billion refinery has begun exporting jet fuel to Europe, further solidifying its role as a critical player in the global energy landscape.

As the tug-of-war between IOCs and Dangote’s refinery unfolds, the stakes remain high, impacting energy security and economic growth across the continent.