Nigerian legislators have launched an investigation into allegations of contaminated fuel imports, aiming to address friction between Aliko Dangote’s oil refinery and the industry regulator. The inquiry, led by Ikenga Ugochinyere, is also scrutinizing claims of “indiscriminate issuance of licenses” and the absence of international standard laboratories linked to the contaminated products.
The committee has urged petroleum sector stakeholders to “de-escalate tensions,” which have been exacerbated by regulator accusations that Dangote is attempting to monopolize the market and that his refinery’s products are substandard. Despite opening over a year ago, Dangote’s $19 billion refinery in Lagos, Africa’s largest, has struggled to secure crude oil supplies due to oil theft and corruption, undermining its goal of reducing Nigeria’s reliance on imported petrol.
Devakumar Edwin, a vice-president at Dangote Industries, accused international oil companies in Nigeria of sabotaging the refinery’s success by demanding excessive premiums or claiming that crude oil is unavailable. This challenge was intensified when the Nigerian Midstream and Downstream Petroleum Regulatory Authority criticized the refinery’s product quality as “inferior” compared to imports.
Regulatory agency chief Farouk Ahmed alleged that Dangote is seeking to suspend or halt petroleum product imports, which he argued could lead to monopolistic practices detrimental to the market. Dangote denied these claims, invited lawmakers to inspect the plant, and refuted allegations of receiving government incentives for the refinery.
The origins of the conflict between Nigerian authorities and Dangote are unclear but may have emerged following last year’s presidential election, which saw President Bola Tinubu succeed Muhammadu Buhari, a Dangote ally. Analysts caution that such disputes could deter foreign investment at a time when Nigeria is working to stabilize its economy. Economist Bismarck Rewane noted that claims about the refinery’s product quality seem “odd” without substantial evidence or consumer complaints.
Dangote has also announced plans to halt investments in Nigeria’s steel industry. The refinery’s difficulties in sourcing crude oil have been exacerbated by Nigeria’s compromised production capacity due to theft and corruption. Despite these setbacks, Dangote remains committed to resolving issues with regulatory authorities.
The legislative committee’s ongoing investigation into contaminated fuel imports and related issues aims to ensure transparency and accountability in Nigeria’s petroleum sector. The resolution of these disputes is crucial for the country’s economic stability and future investments in the oil industry.
