Latest news with #NigerianMidstreamandDownstreamPetroleumRegulatoryAuthority
Business Insider
a day ago
- Business
- Business Insider
Africa's richest man tells Nigerian government to ban fuel imports, but marketers raise concerns about monopoly
Africa's richest man, Aliko Dangote, has called on the Nigerian government to stop the importation of petrol, diesel, and other refined fuel products. He believes the country should prioritise local production under the 'Nigeria First' policy introduced by President Bola Tinubu. But oil marketers and industry groups are pushing back, warning that such a move could lead to monopoly and affect fuel supply and pricing. Africa's richest man, Aliko Dangote, asked the Nigerian government to stop importing petrol and diesel, saying it's hurting local refineries and damaging the economy. He believes the government should support local production and claimed his refinery has already exported over 1.3 billion litres of petrol in less than two months. But fuel marketers strongly disagree, warning that banning imports could create a monopoly and make fuel supply more difficult for Nigerians. Speaking at the Global Commodity Insights Conference in Abuja, hosted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in partnership with S&P Global Insights, Dangote made it clear that petroleum products should be included in the list of banned imports. He said, 'The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors.' According to him, local refineries are struggling because of what he called dumping of fuel by importers; bringing in products that are below acceptable standards and cheaper than what local producers can offer. 'And to make matters worse, we are now facing increased dumping of cheap, often toxic petroleum products, some of which are blended to substandard levels that would never be allowed in Europe or North America,' he said. He also pointed to the influence of Russian crude oil on African markets. 'Due to the price caps on the Russian petroleum products, discounted petroleum products produced in Russia or with discounted Russian crude find their way to Africa, severely undercutting our local production, which is based on full crude pricing. This has created an unlevel playing field in most African countries. Petrol and diesel are sold for about a dollar net of taxes. In Nigeria, due to this unfair competition, this price is just about 60 cents, even cheaper than Saudi Arabia, which produces and refines its own oil. This is due to the fact that we are having too much dumping,' he said. He also addressed the issue of monopoly: 'Let me take this opportunity to address concerns around monopoly and dominance. The reality is that too many people who have the means and the opportunity to contribute meaningfully to our nation's growth choose instead to criticise from the sidelines while investing their wealth abroad.' To show that his refinery is performing well, Dangote shared that Nigeria has already become a net exporter of refined fuel. 'Today, Nigeria has actually become a net exporter of refined products. Before I came on the podium, I asked my people how many tonnes of PMS we have actually exported. From June beginning to date, we have exported about 1 million tonnes of PMS, within the last 50 days,' he said. Marketers push back But oil marketers are not in support of the idea. The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) said banning imports would hurt the industry. Chinedu Ukadike, National Publicity Secretary of IPMAN, said, 'We independent marketers will depart from that request. If the government does that, that means we will not be able to check inflation and monopoly, since it is the only refinery operating in the country now. We should continue to import even as we buy locally.' He disagreed with Dangote's claim that importation hurts local refining. 'Importation won't kill local businesses or refineries; it will strengthen them. It will ensure local refineries step up their game. I don't agree with Dangote on this,' he said. Billy Gillis-Harry, National President of PETROAN, also pushed back on the suggestion. 'I don't agree with Dangote. We are running a free economy. There's no reason why any one company should have an overarching value on the entire industry.' He added, 'Importation is not killing the economy. Importation is stabilising the sources of petroleum products. Importation of all products is useful. However, those that can be produced in Nigeria, like toothpicks, garri, egusi soup, cassava, and others like that, should be banned. But importation of refined petroleum products should not be banned because it helps to ensure that there are multiple sources of energy and replenishment.' What's next for Dangote Last Friday, Dangote stepped down as Chairman of Dangote Cement to focus more on his refinery, petrochemicals, fertiliser business, and government engagement. The billionaire businessman has insisted that his refinery can meet Nigeria's fuel needs. He recently shared that production would rise from 650,000 barrels per day to 700,000 by December.
Business Insider
7 days ago
- Business
- Business Insider
Dangote exposes black market fuel cartels undermining refinery development in Africa
Speaking at the Global Commodity Insights Conference on West Africa organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in partnership with S&P Global in Abuja, Dangote warned that these shadow networks are undermining efforts to build local refinery infrastructure by manipulating prices and supply chains with emphasis on the maritime fuel trade centered around Lome, Togo. He explained that international traders have long exploited the lack of refining capacity in Africa by storing and selling imported refined petroleum products offshore at inflated prices. ' The market is a uniquely African phenomenon, ' he said. ' International traders maintain floating storage of about two million tonnes of petroleum products just offshore. These were being sold at inflated prices, given the lack of local refining capacity. Immediately, the Dangote Refinery became operational, they decided to crash the prices.' Dangote argued that the move was deliberate. ' Make no mistake, those who profit from this system will do everything they can to prevent other refineries from emerging." "The whole essence of Lome is to ensure that no refinery operates in Sub-Saharan Africa. In fact, I don't see any new major refining project succeeding with the offshore Lome market in existence.' He warned that these shadow networks manipulate supply chains and undercut prices, ultimately deterring investment in large-scale refining infrastructure. ' We cannot continue to allow a parallel oil economy to dictate the fate of Africa's energy self-sufficiency, ' Dangote said. Africa's push for fuel sufficiency Dangote's comments come amid renewed efforts by African leaders to attract private capital into local refining infrastructure in order to reduce dependency on foreign fuel imports and retain more value within the continent. Despite efforts to expand refining capacity, Nigeria and other West African nations still import nearly 69% of their gasoline, according to Farouk Ahmed, head of Nigeria's Midstream and Downstream Petroleum Regulatory Authority. In 2025, West Africa trades approximately 2.05 million metric tonnes of gasoline each month, yet only 31% is supplied by local refineries. Despite the region's position as a major hydrocarbon producer and a growing refining hub, it continues to depend heavily on fuel imports from Europe, the Middle East, and Asia. Africa's push for fuel self-sufficiency is driven by strategic reforms, infrastructure investments, and policy changes aimed at reducing reliance on imported petroleum products. . Aliko Dangote pointed to a major challenge undermining progress: the lack of harmonised fuel standards across African countries. Unlike Europe's unified system, each African nation maintains its own specifications.
Business Insider
29-04-2025
- Business
- Business Insider
Concerns mount as Nigerian refinery shuts down after $897.6m in maintenance funding
The recent shutdown of the Warri refinery barely a month after being declared operational, has sparked growing concerns over the transparency and efficiency of Nigeria's refinery management. According to a document from the Nigerian Midstream and Downstream Petroleum Regulatory Authority obtained by The Punch, the refinery, which absorbed $897.6 million in maintenance costs, failed to produce Premium Motor Spirit (petrol) and was shut down just a month after former NNPC Group CEO Mele Kyari declared it operational. Industry operators and experts have expressed disappointment over the situation. Further findings revealed that the Port Harcourt Refining Company, which resumed operations in November 2024, is operating at less than 40% of its capacity. Despite substantial investments and rehabilitation initiatives, these refineries continue to face operational challenges that hinder their full functionality. The refinery, commissioned in 1978, was designed to supply markets in Nigeria's southern and southwestern regions. Its petrochemical plant has a capacity of 13,000 metric tons of polypropylene and 18,000 metric tons of carbon black annually. Despite receiving $897.6 million in maintenance funding, the refinery ceased operations on January 25, 2025, due to safety issues in its Crude Distillation Unit Main Heater—raising fresh doubts about oversight and performance under the Nigerian National Petroleum Company Limited (NNPCL). Revamp efforts hit wall Nigeria's government-owned refineries have long been plagued by neglect, mismanagement, and corruption—persistent symptoms of the country's troubled oil sector. Despite renewed efforts to rehabilitate the Port Harcourt, Warri, and Kaduna refineries in a bid to reduce dependence on imported petroleum products and boost domestic refining capacity, progress remains slow and uneven. Hopes were briefly rekindled when private sector investments, particularly the Dangote Refinery, emerged as potential game changers for Africa's top oil producer, which has relied on imported fuel for decades. Despite initial optimism, recent developments cast doubt on the government's seriousness in revamping its moribund refineries. According to the NMDPRA document obtained by The Punch, the Warri Refining and Petrochemical Company was shut down on January 25, 2025, due to safety concerns with its Crude Distillation Unit (CDU) Main Heater—barely a month after being declared operational. Meanwhile, the Port Harcourt Refinery, which resumed operations in November 2024, is operating at just 37.87 percent of its installed capacity, far below the 70 percent claimed by NNPC spokesperson Femi Soneye. The refinery, with a nameplate capacity of 60,000 barrels per day, produced an average of 82.55 million litres of refined products monthly between November 2024 and April 2025—about 135.45 million litres short of its optimal output of 218 million litres. These figures sharply contradict NNPC's projections at the plant's recommissioning, where the firm claimed the facility would deliver daily outputs of 1.4 million litres of Straight-Run Gasoline for blending into Premium Motor Spirit (PMS), 900,000 litres of kerosene, 1.5 million litres of diesel, and significant quantities of LPG and jet fuel.
Reuters
15-04-2025
- Business
- Reuters
Nigeria plans petroleum products stockpile to counter global supply shocks
LAGOS, April 15 (Reuters) - Nigeria plans to establish a national strategic petroleum products stockpile this year to safeguard its economy against disruptions in the international market, the petroleum products regulator said at a press briefing on Tuesday. Farouk Ahmed, head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, said the reserve, which the country's oil law mandates, would mitigate supply shocks and enhance the nation's energy security. Nigeria, despite its oil wealth, frequently experiences fuel shortages and long queues. The country aims to use expanding domestic refining capacity, particularly the 650,000-barrel-per-day Dangote Refinery, to build resilience against global supply fluctuations. While Nigeria currently maintains petroleum products reserves to cover approximately 30 days of supply, Ahmed said the new National Strategic Stock, modelled on the United States' Strategic Petroleum Reserve, would be significantly larger. He did not specify the volume of the planned reserves. Nigeria's Petroleum Industry Law mandates the regulator to issue a bulk petroleum liquids storage licence to private depots that can hold products for as long as needed. Startup of the Dangote Refinery in September, along with five smaller refineries, has significantly reduced Nigeria's gasoline imports from 50.8 million litres per day in September to 28.7 million litres per day last month. Data from the regulator indicate that currently operational local refineries are projected to process 770,500 bpd until June. The regulator expressed optimism that refining expansion could eventually eliminate the need for gasoline imports.
