…says queues return likely if supply to Dangote Refinery is not addressed

By Joseph Erunke, Abuja

The House of Representatives Committee on Petroleum Resources (Downstream) on Thursday raised a serious alarm over a looming increase in the pump price of Premium Motor Spirit (PMS), warning that Nigeria could face fresh fuel price shocks if urgent action is not taken within the next 48 hours.

Chairman of the committee, Hon. Ikenga Imo Ugochinyere, at a media briefing in Abuja, said the development was linked to critical supply challenges affecting domestic refineries, particularly the Dangote Refinery, which he described as a key national asset.

According to him, the committee’s oversight investigations revealed that the refinery is currently receiving far below the required volume of crude oil needed to sustain operations and stabilize fuel prices.

He explained that although the refinery is entitled to about 21 crude cargoes, with at least 15 expected from Nigeria, findings by the committee showed it is presently receiving only five cargoes, a situation he described as “dangerously inadequate.”

“This shortfall has serious implications for domestic fuel production and may inevitably lead to higher pump prices if not urgently corrected,” he warned.

Beyond the issue of insufficient supply, Ugochinyere also expressed concern over the quality of crude oil being delivered to the refinery, alleging that the grade supplied does not meet the expected standard for a facility of Dangote Refinery’s scale.

He said it was unacceptable that a refinery processing crude from Nigeria’s Niger Delta should receive what it termed substandard crude supply, calling for an immediate review to ensure that domestic refineries receive first-line quality crude oil.

One of the most alarming discoveries, according to him, is that Dangote Refinery and other domestic refineries are being compelled to pay over $18 per barrel in premium charges to international trading companies in order to access Nigerian crude.

The Chairman said the practice forces Nigerian refiners to buy crude produced within the country through foreign middlemen based in cities such as London and Dubai.

“For every barrel priced at $100, the refinery ends up paying about $118, with the extra $18 going to international traders who merely sign documents,” he said.

He added that the premium, which used to range between $2 and $4 per barrel, had surged sharply due to global market disruptions linked to conflicts in the Middle East, warning that the additional costs would ultimately be passed on to Nigerian consumers.

“For every one million barrels, that translates to about $18 million paid to middlemen overseas. Nigerians are the ones who eventually bear this cost at the pump,” he noted.

To avert a looming fuel crisis, the committee called for immediate intervention by the Federal Government and relevant agencies.

Among its demands, the committee asked the Presidential Technical Committee on Crude-for-Naira to reconvene within 48 hours to resolve crude supply challenges affecting domestic refineries.

It also called for the immediate restoration of adequate crude cargo volumes to Dangote Refinery and other indigenous refineries, strict enforcement of the Domestic Crude Oil Supply Obligation under the Petroleum Industry Act (PIA) 2021, and an end to what it described as the exploitative $18 per barrel premium imposed by international traders.

In addition, the lawmakers urged President Bola Tinubu to issue a stronger executive directive to ensure compliance with policies designed to prioritize crude supply to local refineries.

While assuring Nigerians that the committee was working to prevent a fuel crisis, the chairman urged citizens to remain calm and avoid panic buying.

“We are not here to cause panic,” he said.

“But if refineries continue to face crude shortages and the excessive premium remains unchecked, fuel queues may return and prices may adjust in the coming days.”

He emphasized that Nigeria, as one of Africa’s largest crude oil producers, should not struggle to supply its own refineries.

Describing the 650,000 barrels-per-day Dangote Refinery as the country’s most critical downstream infrastructure, he said protecting its operations was vital to stabilizing Nigeria’s energy market and reducing dependence on imported fuel.

The committee also commended President Tinubu for efforts toward stabilizing the naira and urged the government to demonstrate similar determination in safeguarding the nation’s domestic energy supply chain.

He concluded the briefing with goodwill messages to Muslims celebrating Eid-al-Fitr and Christians preparing for the Easter season, alongside a renewed call for swift action to prevent further economic hardship for Nigerians.