Nigerian lawmakers have set up a committee to investigate the issues of crude shortages to local refineries and the importation of substandard fuels, which are central to the ongoing conflict between the Dangote Refinery and Nigeria’s downstream oil regulator.
The committee, constituted by the House of Representatives on Monday, aims to address these pressing concerns.
The investigation will focus on the alleged importation of inferior fuels, the operations of standards agencies, the reasons why refineries, including the Dangote Refinery, are unable to secure adequate crude supplies, and the increasing 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.
Although the investigative panel cannot act on its findings, it will present its results to the House, which will then make recommendations to the president.
The $20 billion Dangote Oil Refinery, built 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 within Nigeria.
Last month, the Dangote Refinery accused major oil companies of blocking its access to locally produced crude and claimed that the regulator was allowing fuel traders to import high-sulphur gasoil, thereby undermining its operations.
In response, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that the Dangote Refinery was only 45% completed and thus unable to meet the country’s needs.
He also claimed that the gasoil processed by the refinery contained sulphur levels between 650 to 1200 parts per million (ppm), which is inferior to imported products.
Nigerian regulations allow for the sulphur content in gasoil to be about 50 ppm, with enforcement of this standard set to begin next year.
During a visit to the plant on Saturday, Aliko Dangote insisted on testing the gasoil from his refinery against other samples sold in the local market.
The results showed that the diesel from the Dangote Refinery had a sulphur content of 87.6 ppm, while the other two samples had sulphur levels exceeding 1800 ppm and 2000 ppm, respectively.
In light of allegations that he was seeking a monopoly, Dangote announced that he would no longer pursue an investment in steel production in Nigeria.
The investigative panel also stated that 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 added.
