How Fuel Cartels Threaten Dangote Refinery

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The dream of turning around the downstream sector of Nigeria and Sub-Saharan Africa’s oil and gas industry offered by the establishment of the proposed Dangote Refinery may become a nightmare unless fuel cartels within and outside the country and their agents are checkmated.

Nigeria and other sub-Sahara African countries are expected to be the direct beneficiaries of the 650,000 barrels-per-day refinery as the project is expected to drastically reduce the countries’ fuel import majorly from Europe with expected impact on foreign exchange outflows.

With a maximum crude oil production capacity of 2.5 million barrels per day, Nigeria ranks has Africa’s largest producer of oil and the sixth largest oil producing country in the world. Yet, it exports most of this oil to overseas refineries and imports over 65 percent of the nearly 50 million litres of petrol it consumes daily because it has no refining capacity. This has denied the country of the huge potential for economic transformation offered by this resource.

Aliko Dangote, Africa’s richest businessman belled the cat with his determination to help resolve this economic paradox by setting up the largest single train refinery in the world being built in Ibeju-Lekki, Lagos.

Experts forecast that when completed, Dangote Refinery and other modular refinery projects across West Africa, would lead to the integration of the downstream industries, and stabilize the prices of petroleum products not just in Nigeria but across the African sub-region.

The refinery is designed to process multiple grades of domestic and foreign crude, which can be converted into high-quality gasoline, diesel, kerosene, and aviation fuels that meet Euro V emissions specifications. The facility would be integrated with a petrochemical unit that will produce polypropylene and fertilizers and transform Nigeria into the largest exporter of fertilizer in Africa.

But there are fears that unless the Government and the Dangote Group can checkmate internal and external saboteurs, the fate of Ajaokuta Steel Company may befall it.

Attempts have been reported by fraudulent companies and contractors seeking contracts and some already contracted, to side-track the stringent internal audit structures put in place and compromise quality of the project.

An engineer at the site who spoke on condition of anonymity, revealed that some contractors and sub-contractors have submitted invoices for uncompleted jobs and insisted on being paid.

“This is a sign that some saboteurs are working here and they may be agents of vested interests who do not want to see the refinery take-off,” the source revealed, adding that they have sought to slow down the pace of work by creating an unnecessary conflict around the project.

Other sources who also spoke on the refinery project explained that oil cartels within and outside the country who feel their interests threatened by the refinery may seek to stop or delay it operations indirectly, by working through weak and fraudulent companies that may already be on site.

Fuel subsidy scammers who had benefitted from decades of rot in the regulation of fuel imports into the country, and whose interest would be threatened when the refinery takes-off, would be eager to stall its progress.

Investigations also showed that some promoters of companies which have a history of criminal activities are believed to have repackaged and secured sub-contracting jobs at the refinery using new companies. Some of these companies are said to be a security watch list.

But they have managed to divert attention by attacking other more reputable companies and portraying them as those scheming to frustrate the refinery project.

The Dangote Refinery project has offered reputable Nigerian companies in the oil and gas sector a huge opportunity for growth and many of them are relishing it.

Amongst them is the Omiti Engineering Nigeria Limited, a leader in multidisciplinary engineering services, which commenced business in 2012 and is already setting standards in the industry.

Omiti is one of the companies said to be facing sabotage through blackmail from other Nigerian subcontracted companies due to its insistence on quality work and compliance with the established audit structure of the Dangote Group. Their common method of blackmail is the use of social media to spread lies against Omiti.

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