Dangote Refinery

By Dunni Aladefa

It seems the last has not been heard of the Dangote Refinery saga. It is turning out to be a drama in many acts.

Since Engineer Farouk Ahmed,  Authority Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority  (NMDPRA ), a regulator of Nigeria’s Midstream and Downstream Petroleum sector,  accused the Dangote Refinery of producing and supplying low-quality diesel, so much drama has taken place that has had Nigerians wondering what is going on.

Engineer Ahmed had claimed that diesel from Dangote Refinery contains at least 400 per cent higher content of sulphur than the European Union standard. Dangote had fired back by accusing NMDPRA of spreading falsehoods about the refinery in a bid to frustrate its operations and place the International Oil Companies  (IOCs) at an advantage. He also accused the Nigerian National Petroleum Company  Limited (NNPCL ) of importing adulterated petrol from Malta.

As both organizations denied the allegation,  describing it as diversionary,  Dangote received support from a most unlikely source. Philip Agbese, a member of the House of Representatives representing a constituency in Kogi State, was charged with Dangote’s defence. The lawmaker who is making his debut in parliament having been elected into the House of Representatives, pronounced Dangote innocent of the allegation against him. Agbese said lab tests indicated that diesel had a sulphur of 87.6ppm (parts per million).

The clean bill handed to Dangote Refinery by Agbese was viewed suspiciously by Nigerians particularly as the test was conducted by the refinery without an independent assessor present.  It was done during a visit to the refinery by members of the House of Representatives on July 20

It has now turned out that the suspicion of Nigerians about that test by the Dangote Refinery was not misplaced. An Abuja-based newspaper disclosed a few days ago that an independent laboratory test conducted recently showed that Dangote Refinery and other modular refineries produced diesel with sulphur content ranging from 650 ppm (parts per million) to 1200 ppm.

Sulphur is a natural element in crude oil, which is usually removed during refining processes because high amounts in fuel damage engines and cause environmental pollution.

As a chemist explained recently, “When fuel with high sulphur content is burnt, it produces sulphur dioxide (SO2), a harmful gas that contributes to environmental pollution. This is particularly concerning as sulphur dioxide is a major contributor to acid rain, which can harm ecosystems, damage buildings and infrastructure, and pose health risks to humans and animals”.

According to the newspaper, official documents revealed that the Collated Test Results of AGO (Diesel) including lab results of diesel fuel supplied to retailers between April and June, revealed that the sulphur content in Dangote diesel went up to as high as 1200 ppm.

The fuel, delivered in 32 batches, was supplied to different depots of Rain Oil, AA Rano, TMDK Oil, Kashton, NIPCO, Sobaz, and other retail companies. The amount of sulphur found in Dangote diesel averaged 937 ppm, with the lowest of 705 ppm in April and the highest of 1200 ppm in a supply to NIPCO on June 16.

In line with NMDPRA regulations, these supplies were tested by Dangote’s quality assurance team and verified by independent international testing companies who also issued certificates of analysis.

The newspaper noted that sources familiar with the company’s operations say the testing did not reflect the actual results of the diesel fuel Dangote Refinery supplies to the market.

A source said: “That test is far from the reality on the ground. It was done to mobilise members of the public against the federal government and force the government to reach a deal with the refinery.

“In fact, on July 22, two days after the lawmakers’ visit, Dangote Refinery delivered a shipment of diesel fuel containing 950 ppm of sulphur to AA Rano’s depot in Ijegun, Lagos.”

Records also showed that the same shipment was first tested by Dangote’s quality control department on July 13 and was confirmed to contain 1095 ppm of sulphur. The certificate of analysis was authorised by Nikunj Parikh, a senior chemist at Dangote, and witnessed by an independent lab chemist, Solomon Efe.

It is clear from this latest development that Dangote has been pulling the wool over the eyes of Nigerians using his position as an Indigenous businessman to blackmail the government into overlooking his shenanigans and bend over backwards to give his business preferential treatment.

For many years,  successive governments have put Dangote in a position of advantage over businesses to the extent that many of them have gone under. He has thus gotten used to having his way with the government and expects that every government policy must either work to his advantage or be adjusted to do so when it didn’t.

The oil industry is a different ball game from what he is used to and he must understand that there are rules of engagement,  which ought to be adhered to in the interest of not only the players in the sector but of the public who make use of the products of he and his competitors.

The latest revelation by the Abuja newspaper regarding the sulphur level in the diesel produced and sold by Dangote Refinery is something that needs to be addressed urgently before much damage is done both to people’s vehicles and their lives.

The National Assembly comprising the Senate and House of Representatives must act immediately to address this issue independently and impartially. It had been troubling seeing Agbese, a lawmaker who ordinarily ought to perform oversight functions over Dangote Refinery and other entities in the Midstream and Downstream sectors of the Nigerian petroleum industry, putting up a spirited defence of the businessman even when investigation of the matter is ongoing at the House of Representatives.

It is heartening to hear Agbese’s colleagues a few days ago insisting it was wrong of him to pronounce a verdict on an issue still under investigation by the House. Agbese’s call for the sack of Engr. Ahmed and Malam Mele Kyari,  Group Chief Executive Officer  (GCEO) of NNPCL,  was also dismissed by his colleagues as misplaced.

For the sake of clarity and so Nigerians who have quickly jumped to the support of Dangote and have demonized the NNPCL and NMDPRA,  the point must be made that Dangote is running a business like millions of other Nigerians and the same rules that apply to him, applies to others. There is no room for preferential treatment even though it is a universally acknowledged fact that successive Nigerian governments have been over-gracious to him in shifting the goalpost whenever he needed them to do so. In this instance, the situation is different.

The oil sector is markedly different from the other sectors Dangote has exercised virtual monopoly over. The NNPCL is a competitor like Dangote whilst the NMDPRA is the regulatory agency overseeing the Midstream and Downstream Petroleum sector of the oil and gas sector. By its position,  the NMDPRA sets the ground rules and takes steps to enforce them. Every organization doing business in the sector NMDPRA regulates including NNPCL and the IOCs are expected to submit their operations to scrutiny by the regulatory agency as occasion demands. What Dangote Refinery is trying to do is to bully the agency to overlook its shortcomings using Dangote’s connections in government. It is reprehensible and must not be allowed to happen.

Governments all over the world empower their regulators to be able to play their roles in ensuring balance and fair competition in the sector they are overseeing. As a regulator,  the NMDPRA has been dutifully playing its role and must be encouraged.  Its discovery of the substandard diesel Dangote and his refinery have been selling to Nigerians is commendable. If the agency had been asleep on duty, it would not have made its discovery.  Further,  had Engr. Ahmed had not been a patriotic Nigerian,  he would gladly have looked the other way and allowed Dangote and his business to continue to put Nigerians in harm’s way. But he did not, meaning he is doing his constitutionally assigned responsibility of supervising operations of businesses in the Midstream and Downstream sectors with the measure of seriousness it deserves.

As for the NNPCL, Dangote’s attempt to blackmail it by accusing it of refusing to sell crude to his refinery is a disingenuous attempt to play the ostrich. NNPCL like the IOCS has entered into crude supply contracts with companies, which it cannot break without attracting legal consequences.  Besides,  the forward sale agreements entered into by the Muhammadu Buhari and Bola Tinubu administrations, which pledge thousands of barrels daily as advance payment for loans taken, have depleted the stock of crude available for sale either to Dangote or any other business for that matter.

The author is an Abuja based Public policy analyst and commentator