The regulator of the midstream and downstream petroleum sector has told The PUNCH exclusively that the Dangote Petroleum Refinery has not violated any provision of the Petroleum Industry Act by opting to sell fuel in dollars instead of naira.
Multiple senior sources within the regulatory agency, who spoke on condition of anonymity, said the refinery has the right to recover its costs if it has been purchasing crude oil in dollars.
According to the officials, the Petroleum Industry Act allows operators to earn returns on their investments and recover eligible costs.
“It’s a pretty straightforward issue. The naira-for-crude deal is not to Dangote’s advantage right now. They are sourcing a lot offshore. And with the crisis in the Middle East, the refinery has to recover costs now. It has to survive.
“Basically, to be fair to Alhaji Aliko Dangote, he has tried, if you look at it. He has absorbed a lot. But maybe he has reached a breaking point. So he has to do stuff to recover costs. And that’s why he wants to share that burden with off-takers,” one source said.
Another official told our correspondent that the PIA permits operators that incur costs in dollars to recover those costs in the same currency.
“If you study the PIA relevant schedules and provisions, when it comes to tariffs, you can recover your costs in dollars if that’s what you’ve spent. So, it’s clear. That is the case. There’s nothing wrong with what the Dangote refinery has done. That’s why you’ve not heard any hoopla, even from major off-takers. Dangote is incurring costs in dollars. So what do you want him to do?” the official said.
