Dangote Industries Limited has refuted accusations that the diesel produced by Dangote Refinery contains the highest sulfur levels in West Africa.
President of Dangote Industries, Alhaji Aliko Dangoteaddressed these claims on Saturday during a visit by a delegation from the House of Representatives to the refinery in Lagos.
He also responded to concerns regarding monopoly.
“Despite initial complaints about the drop in diesel prices, even at 650-750 PPM, our diesel quality surpasses that of imported fuel. The problems with vehicles are due to substandard imported fuel. We stand by our quality, which can be verified by checking samples from filling stations,” the richest man in Africa stated.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, Chief Executive, Farouk Ahmed, commented on Thursday, “Regarding quality, the AGO (diesel) quality of Dangote Refinery, in terms of sulfur, is currently the lowest in West Africa at 50 parts per million (ppm).
“Dangote Refinery, along with Waltersmith Refinery, produces between 650 ppm and 1,200 ppm, which is inferior to imported quality.”
Ahmed also dismissed allegations that the refinery’s operations were being hindered due to a lack of crude oil supply from International Oil Companies (IOCs).
“Contrary to media claims, we are not attempting to scuttle the Dangote Refinery. It is still in the pre-commissioning stage and has not been licensed yet. With only 45 percent completion, relying solely on this refinery to supply the nation is not feasible, especially with Dangote requesting the suspension of all petroleum product imports,” he explained.
This expectation is detrimental to both national energy security and market competition due to monopoly concerns.
During the House delegation’s visit, Dangote addressed these issues, saying, “Initially, our diesel quality was at 600-700 PPM due to the new plant. Currently, production is at 87 PPM, and by the end of August, it will reach 10 PPM. I urge the House leadership to establish a committee to verify the quality by sampling from fueling stations and our production line. Fake test certificates are circulating, so a reliable testing process is essential.”
On monopoly concerns, Dangote added, “If we are questioned about our market supply capacity, consider the 4 billion Naira spent by NNPC to activate refineries in Kaduna, Warri, and Port Harcourt. With operational refineries, we cannot be a monopoly. NNPC is more powerful, making us incapable of monopolizing. Regulators use this as an excuse to issue licenses for substandard products. Despite being the sole PMS importer, NNPC is not labeled a monopoly. Our goal is to support the nation, not monopolize. We postponed sales to avoid further monopoly claims and adjusted diesel prices to 1,200 Naira to reflect profit margins. Even with the current exchange rate, our diesel price below 1,200 Naira is justified. Claims of incorrect pricing by Darkman are false. We sell in Naira to reduce prices, unlike NNPC, which only accepts dollars. Our priority is Nigeria’s growth, which is intertwined with our success.”
Regarding the NNPC stake in the refinery, Dangote explained, “A deposit of one billion dollars, about 7.2%, was agreed upon. Despite granting an additional year, which expired on June 30, the group CEO indicated they wanted to retain their 7% stake but have yet to pay. We have not received anything in writing.”
He highlighted other challenges faced, “We underwent 31 projects in the last seven years, with only three reaching completion. We avoided project financing due to stringent requirements and faced pressure from the Naira’s collapse from 156 to 1,500-1,600. Despite COVID-19, international bankers did not grant waivers or delayed payments, forcing continuous payments. Delays, including a three-and-a-half-year delay by Ogun State Governor Amosun, led to over $600 million in losses. The total amount allocated from the Central Bank was $2.7 billion over 13 years, with an additional $200 million pending. Dangote Industries reinvests its dividends in Nigeria, debunking claims that our projects deplete Central Bank funds.”
This detailed response from Dangote Industries aims to clarify their stance on diesel quality, monopoly concerns, and the challenges faced during the refinery’s development.
