Financial Energy Review
…..As Dispute Escalates Over Alleged Substandard Fuel Imports in Nigeria…..
The controversy surrounding the alleged importation of substandard petroleum products into Nigeria intensified on Thursday, with key oil marketers vehemently denying claims made by Dangote Refinery. The refinery’s accusations have raised concerns about the quality of imported petrol in the wake of the deregulation of Nigeria’s downstream oil sector.
Dangote Refinery, a dominant player in the Nigerian oil industry, recently warned Pinnacle Oil and Gas Limited and other marketers that the deregulation of the oil sector should not be used as an excuse to import off-spec petroleum products. The refinery’s management expressed fears that such practices could undermine national interests and the country’s energy security.
In a statement issued earlier this week, Dangote Refinery also claimed that Pinnacle Oil had approached them with a request to extend pipelines to its tank farms in order to blend substandard imported petroleum products with Dangote’s “high-quality” fuel.
However, Pinnacle Oil and other marketers have strongly rejected these accusations, labeling them defamatory and unfounded. The Managing Director/Chief Executive Officer of Pinnacle Oil, Robert Dickerman, publicly responded to Dangote’s claims on Thursday, insisting that his company operates under strict regulatory oversight and adheres to high industry standards.
“We cannot bring in off-spec products into this country,” Dickerman declared at a press briefing in Lagos. “We are inspected by independent bodies like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Standards Organisation of Nigeria (SON). They inspect our products thoroughly before they are allowed into the country, so the claims made by Dangote are not just inaccurate, but completely false.”
Dickerman further explained that Pinnacle Oil had signed a 13-year interconnection agreement with Dangote Refinery for the distribution of its petroleum products via pipelines. He emphasized that the project was fully supported by Dangote and had gone through all necessary regulatory channels. “This is a strategic project designed to improve efficiency and reduce costs. We proposed and invested in pipelines to distribute petroleum products from Dangote Refinery because pipeline transfer is far less costly than transporting fuel by ship or truck,” he said.
The Pinnacle Oil CEO also defended the project, stating that Dangote Refinery had facilitated the approval process by writing letters of support to the relevant regulatory authorities, including NMDPRA. “We reached this agreement in early 2023, after months of engineering design, surveying, and securing the necessary rights of way,” Dickerman explained. “At no point did Dangote oppose the project. In fact, they were fully supportive.”
In an apparent attempt to deflect allegations, Dickerman also denounced Dangote’s characterization of Pinnacle’s operations. “The statement issued by Dangote Refinery on November 5 was deeply concerning, as it contained numerous defamatory and misleading assertions. The accusations about us blending off-spec products are simply false, and the claim that we are trying to undermine the country’s national interest is unfounded,” he added.
The dispute over the alleged blending of substandard fuel has not only sparked tensions between Dangote Refinery and Pinnacle Oil but has also raised wider questions about the integrity of the oil sector in Nigeria, particularly since the government deregulated fuel pricing earlier this year.
Industry experts and other oil marketers have voiced their concerns, expressing support for Pinnacle Oil’s position. Key oil marketers have reemphasized the rigorous testing procedures enforced by regulatory bodies like NMDPRA and SON.
“The testing process is incredibly thorough. At each stage of the supply chain, from the point of importation to the final delivery, NMDPRA and SON conduct independent tests,” the some marketers insist. “When the product arrives in Nigeria, it is tested again at Atlas Cove before it even leaves the ship. Afterward, NMDPRA carries out further tests at the discharge point before allowing the product into our tanks. Even at the loading stage, another round of testing is conducted before we are cleared to distribute the fuel.”
Marketers insist that these stringent protocols ensure that only compliant products are sold to consumers. “We do not have the liberty to bypass these regulations. The testing agencies oversee everything to guarantee quality,” they said.
In response to claims of substandard fuel imports, the Nigerian National Petroleum Company Limited (NNPC) has also found itself at the center of controversy. A viral video recently surfaced, alleging that an NNPC retail outlet at Keffi Flyover was selling contaminated fuel in jerrycans. NNPC, however, denied the claims, calling them “false and misleading.”
“We have conducted spot checks at all our outlets and found no evidence to support this claim,” said Olufemi Soneye, spokesperson for NNPC Retail Ltd. “The product displayed in the video could not have been purchased at any NNPC Retail outlet, as we do not dispense petroleum products in bottles or jerrycans.”
NNPC further emphasized its commitment to maintaining high standards in fuel distribution. “NNPC Retail Ltd adheres to strict quality control measures at every stage of our operations to ensure that only safe and reliable petroleum products are available at our stations nationwide,” Soneye added. “The public should disregard these unfounded claims and be wary of those spreading false narratives that are damaging to the country’s reputation.”
The ongoing dispute between Dangote Refinery and Pinnacle Oil, as well as the allegations surrounding NNPC, have cast a spotlight on the challenges facing the Nigerian oil sector. As the country grapples with rising fuel prices and ongoing efforts to stabilize the downstream industry, stakeholders are calling for greater transparency, stronger regulatory oversight, and accountability.
“We know the quality of our products, and we stand by the integrity of our operations,” said an official from NMDPRA, who spoke to *Business Standards* on the condition of anonymity. “We have well-equipped laboratories where petroleum products are tested before they are released for public consumption. Neither Dangote Refinery nor any marketer can blackmail us into compromising our standards. We remain firm in our commitment to ensuring that only high-quality products are available to Nigerian consumers.”
As the government continues to deregulate the downstream sector and implement policies aimed at improving fuel distribution efficiency, experts stress that maintaining public trust in the regulatory process will be crucial for the future of the oil and gas industry in Nigeria.
