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.”
“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
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.
The refinery is also preparing to launch a fuel delivery scheme starting August 1. It is currently receiving 4,000 CNG-powered trucks that will deliver petrol, diesel, and aviation fuel directly to filling stations and bulk buyers like telecom companies.
Source: This report includes information originally published by Punch Newspapers.
