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Forex Irregularities Scare Marketers Off Kerosene Importation



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  • Forex Irregularities Scare Marketers Off Kerosene Importation

Oil marketers in Nigeria are still reluctant to resume the importation of Dual Purpose Kerosene (DPK), after abandoning the venture for over two years on the grounds of unprofitability.

The marketers complained that access to foreign exchange (forex) for the importation of DPK is marred by irregularities.

Two years after the Federal Government removed subsidy on the product, marketers discontinued their participation in the product’s importation amid prevailing demand from households, and largely the aviation sector.

Kerosene is being imported and sourced from local refineries by the Nigerian National Petroleum Corporation (NNPC) solely, and sold to marketers at a deregulated ex-depot price of about N190 per litre. But the supply of the product has continued to be epileptic, and characterised by price differentials.

Given the rising demand for the product as aviation fuel, some households that depend on the product, pay as high as N350 per litre to get it for domestic use.

Responding to queries from The Guardian on the position of marketers, Major Oil Marketers Association of Nigeria (MOMAN), disclosed that marketers are facing challenges in the importation other petroleum products, and not just DPK.

MOMAN said: “In the current environment, marketers are facing challenges with respect to importation of all products whether deregulated or not, because of challenges in accessing foreign exchange at competitive rates.

“NNPC sells Dual Purpose Kerosene (DPK) to marketers at an ex-depot price of N190 per litre. If marketers were to import the product using their (marketers) importation template, the landing cost would be N225 per litre due to the rate at which we access foreign exchange.
“The full benefits of competitive importation and full price deregulation can only be felt in an environment where all importers have equal access to foreign exchange at the same competitive rates.”

The Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPMAN), and other marketers, said they stayed away from kerosene importation because of outstanding subsidy arrears being owed by the Government.

According to the World Bank, over 51 per cent of Nigerians reside in the rural area, and depend on kerosene to cook or light their homes or opt for firewood due to the high cost of the product. While the figure of people cooking with firewood or charcoal rises, the World Health Organisation (WHO), reported that over 470,000 Nigerians have died in the past five years from firewood induced sicknesses.

A report published by a Non-Governmental Organisation, Power for All, noted that over 66 per cent of households in Nigeria use kerosene for lighting and cooking, while the Nigerian Bureau of Statistics (NBS), put the proportional use of kerosene by Nigerian households at 22.8 per cent for cooking, and 57.8 per cent for lighting, mostly by the rural and peri-urban poor.

Taofeek Lawal, the spokesperson for Nipco Plc, the marketing and distribution joint venture company of IPMAN, in a telephone interview, said although the DPK market is perceived to be deregulated, but realities have shown that it is partially deregulated.
Citing the Automotive Gas Oil (AGO) market, which is fully deregulated, he noted if the DPK market was equally deregulated fully, the behaviour of both markets would be similar.

On account of deregulation, the DPK market had seen some level of volatility in price and supply templates at the retail end.
Some marketers that still receive kerosene stock from NNPC, say compared to Premium Motor Spirit (PMS) and AGO, turnover for DPK had remained the worst, while margins on the product has been discouraging.

One marketer that spoke in confidence, said: “After AGO was deregulated, no marketer waits for NNPC for supply despite the fact that NNPC also imports AGO. Marketers go on to import and sell at prices they deem fit. But for DPK, marketers still wait for NNPC’s stock after years of perceived deregulation. That means something is actually wrong with DPK deregulation in Nigeria.”

The National Operations Controller, IPMAN, Mr. Mike Osatuyi, said currently, members of the Association are not importing DPK, but insisted that the DPK market was fully deregulated.

According to him, any IPMAN member can bring in DPK after getting the necessary approvals from the Department of Petroleum Resources (DPR), and the Petroleum Products Pricing Regulatory Agency (PPPRA).

Osatuyi said, “We will start importing DPK when the coast is clear. By this, I mean when we are through with our internal reorganisation. But I must say the demand for the product is dropping, as people are switching over to Liquefied Petroleum Gas (LPG).

“Because we believe the market is fully deregulated, I don’t think we will have any issue with foreign exchange when it is time to import.”

When contacted, the Executive Secretary, DAPPMA, Mr. Femi Adewole, declined to comment. But The Guardian gathered from a member of the Association that forex constraint is a major constraint to kerosene importation.

The source said members who currently deal on the product, concentrate on the supplying to the aviation sector, adding that the margin from selling the product to households is not attractive, and as such not leveraged by marketers.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Peter Obi Advocates for Full Government Backing of Dangote’s $21bn Refinery Project



Peter G. Obi

Peter Obi, a prominent Nigerian politician and public figure, has called for unwavering support for the Dangote Refinery amid recent conflicts between Dangote Industries and government agencies.

In a passionate appeal, Obi said the current disputes extend beyond political and personal differences, touching upon the broader interests of Nigeria’s economy and its future prosperity.

In his statement on, Obi highlighted the refinery’s immense potential to drive economic growth and create employment opportunities.

With an estimated annual revenue potential of approximately $21 billion and the capacity to generate over 100,000 jobs, the Dangote Refinery represents a cornerstone of Nigeria’s industrial advancement and economic stabilization.

“The recent challenges faced by Dangote Industries should not overshadow the vital role this enterprise plays in our national economy,” Obi asserted.

“Alhaji Dangote’s contributions are monumental, and it is essential that we rally behind his ventures, particularly the refinery, which is set to make a significant impact on our fuel crisis and foreign exchange earnings.”

The refinery, with its strategic importance, stands as a beacon of hope for Nigeria’s fuel supply and overall economic development.

It is poised to address long-standing issues in the energy sector, provide substantial revenue streams, and enhance the country’s economic resilience. Given these benefits, Obi stressed that any actions hindering the refinery’s operation would be counterproductive.

Obi also commended Alhaji Dangote for his remarkable achievements across various sectors, including cement, sugar, salt, fertilizer, infrastructure, and more.

“Alhaji Dangote embodies patriotism and commitment to Nigeria’s growth. His extensive industrial activities are not only a testament to his entrepreneurial spirit but also a vital contribution to Nigeria’s economic landscape,” he added.

Despite the challenging business environment, Dangote’s diversified industrial investments demonstrate a commitment to Nigeria’s industrialization and job creation.

Obi urged the Federal Government and its agencies to offer full support to Dangote Industries, recognizing the broader economic benefits and the positive impact on national welfare.

“The success of Dangote Industries is intrinsically linked to the success of Nigeria and Africa as a whole. We cannot afford to let such a crucial enterprise falter,” Obi warned. “Every sensible and patriotic government should view enterprises like Dangote Industries as national treasures that deserve robust support and protection.”

Obi’s appeal underscores the critical need for collaboration between the government and private sector leaders to ensure the successful operation of key projects like the Dangote Refinery.

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Dangote Accuses NNPC and Oil Traders of Secret Operations in Malta




Aliko Dangote, chairman of Dangote Industries Limited, has leveled serious allegations against personnel from the Nigerian National Petroleum Company (NNPC) Limited and certain oil traders.

Speaking at a session with the House of Representatives, Dangote claimed that these parties have established a blending plant in Malta, raising concerns about the integrity of Nigeria’s fuel supply.

Dangote described the blending plant as lacking refining capability, instead focusing on mixing re-refined oil with additives to produce lubricants.

“Some of the terminals, some of the NNPC people, and some traders have opened a blending plant somewhere off Malta,” he stated.

He emphasized that these activities are well-known within industry circles.

Addressing the drop in diesel prices, Dangote argued that locally produced diesel, with sulfur content levels of 650 to 700 parts per million (ppm), is superior to imported variants.

He linked numerous vehicle issues to what he described as “substandard” imported fuel.

He called for the House of Representatives to set up an independent committee to investigate fuel quality at filling stations.

“I urge you to take samples from filling stations and compare them with our production line to inform Nigerians accurately,” Dangote insisted.

The accusations come amid an ongoing dispute between the Dangote Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Farouk Ahmed, NMDPRA’s chief executive, had previously claimed that local refineries, including Dangote’s, were producing inferior products compared to imports.

Also, the House of Representatives has initiated a probe into allegations that international oil companies are undermining the Dangote Refinery’s operations.

In response to the escalating tensions, Heineken Lokpobiri, the Minister of State for Petroleum Resources, intervened by meeting with key stakeholders including Dangote, Ahmed, and other top officials from the Nigerian petroleum regulatory bodies.

The discussions aimed to address claims of monopoly against Dangote, which he has strongly denied, and to ensure that all parties operate transparently and fairly.

This development highlights the complex dynamics within Nigeria’s oil industry. The allegations and subsequent investigations could impact market stability and investor confidence.

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Africa’s Richest Man, Aliko Dangote Ready to Sell Refinery to Nigerian Government



Dangote refinery

Aliko Dangote, Africa’s wealthiest entrepreneur, has announced his willingness to sell his multibillion-dollar oil refinery to Nigeria’s state-owned energy company, NNPC Limited.

This decision comes amid a growing dispute with key partners and regulatory authorities.

The $19 billion refinery, which began operations last year, is a significant development for Nigeria, aiming to reduce the country’s reliance on imported fuel.

However, challenges in sourcing crude and ongoing disputes have hindered its full potential.

Dangote expressed frustration over allegations of monopolistic practices, stating that these accusations are unfounded.

“If they want to label me a monopolist, I am ready to let NNPC take over. It’s in the best interest of the country,” he said in a recent interview.

The refinery has faced difficulties with supply agreements, particularly with international crude producers demanding high premiums.

NNPC, initially a supportive partner, has delivered only a fraction of the crude needed since last year. This has forced Dangote to seek alternative suppliers from countries like Brazil and the US.

Despite the challenges, Dangote remains committed to contributing to Nigeria’s economy. “I’ve always believed in investing at home.

This refinery can resolve our fuel crisis,” he stated, urging other wealthy Nigerians to invest domestically rather than abroad.

Recently, the Nigerian Midstream and Downstream Petroleum Regulatory Authority accused Dangote’s refinery of producing substandard diesel.

In response, Dangote invited regulators and lawmakers to verify the quality of his products, which he claims surpass imported alternatives in purity.

Amidst these challenges, Dangote has halted plans to enter Nigeria’s steel industry, citing concerns over monopoly accusations.

“We need to focus on what’s best for the economy,” he explained, emphasizing the importance of fair competition and innovation.

As Nigeria navigates these complex issues, the potential sale of Dangote’s refinery to NNPC could reshape the nation’s energy landscape and secure its energy independence.

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