Dangote Oil Refinery has maintained that the country’s producers do not supply the facility with enough feedstock.

According to a statement released on Thursday, 8 August 2024 by Anthony Chiejina, Chief Branding and Communications Officer of the Dangote Group, the Nigerian Upstream Regulatory Commission has not been upholding the domestic crude supply requirements as it should.

In response to rumors that the refinery had retracted, Chiejina acknowledged that roughly 60% of the 50 million barrels it had hauled came from the Nigerian National Petroleum Company Limited (NNPC). According to reports, the company made this claim on Wednesday in front of the Senate committee looking into claims of sabotage in the oil and gas industry.

“To be clear, we have never claimed that NNPC has failed to provide us with crude. We have long been concerned about NUPRC’s unwillingness to uphold the domestic crude supply responsibility and ensure that we obtain all of the petroleum we require from NNPC and foreign oil companies.

“NNPC has allotted six of the fifteen shipments that we require for September. We’ve tried appealing to NUPRC, but we haven’t been successful in getting the remaining shipments secured. We contacted IOCs that are producing in Nigeria, but they either pointed us in the direction of their foreign trade arms or told us that their cargoes were committed,” according to Chiejina.

He reaffirmed that the corporation frequently pays an extra $3–$4 per barrel, or $3–$4 million for every cargo, to foreign dealers for the same Nigerian crude.

“As a result, we continue to maintain that we are unable to obtain all of our crude requirements from domestic production, and we strongly encourage NUPRC to fully implement the PIA’s requirement regarding domestic crude supply,” the statement concluded.

The PUNCH recalls that the management of Dangote Group claimed the IOCs were still impeding the refinery’s ability to provide crude oil to its 650,000-capacity facility. The group said that the IOCs insisted on supplying crude oil to its refinery through their international agents, claiming that the local price of crude will keep rising because the trading arms provide cargoes at prices that are higher than the NUPRC’s official pricing, $2 to $4 per barrel. The organization also said that when it comes to selling the crude they produce in Nigeria, the global oil companies appear to be giving preference to Asian nations.

According to Mr. DVG Edwin, Vice President of Oil and Gas at Dangote Industries Limited, “If the Domestic Crude Supply Obligation guidelines are diligently implemented, this will ensure that we deal directly with the companies producing the crude oil in Nigeria as stipulated by the Petroleum Industry Act.” Edwin insisted that the company’s requests for locally produced petroleum to be used as feedstock for its refining process had been continuously thwarted by IOCs operating in Nigeria.

He emphasized that the official price set by the Nigerian Upstream Petroleum Regulatory Commission is often $2 to $4 (per barrel) higher when cargoes are offered to the oil business by the trading arms. Edwin responding to the statement made by Gbenga Komolafe, Chief Executive of the NUPRC, in an interview on national television, said, “It is ‘erroneous’ for one to say that the International Oil Companies are refusing to make crude oil available to domestic refiners, as the Petroleum Industry Act has a stipulation that calls for a willing-buyer, willing-seller relationship,”

The notion was refuted by Farouk Ahmed, the Chief Executive of Nigerian NMDPRA, who stated that Nigeria could not rely solely on the Dangote refinery for its petroleum supplies. Dangote diesel, according to Ahmed, has more sulfur than diesel that is imported into the nation. He said the refinery had asked the regulator to cease granting import licenses to other marketers so it could become Nigeria’s sole fuel supplier.

“We cannot rely heavily on one refinery to feed the nation because Dangote is requesting that we should suspend or stop the importation of all petroleum products, especially AGO, and direct all marketers to the refinery; that is not good for the nation in terms of energy security. And that is not good for the market, because of monopoly,” Ahmed stressed.

Aliko Dangote, the President of the Dangote Group, refuted the accusation, questioning how he could have a monopoly when the Nigerian National Petroleum Company Limited is spending $4 billion to renovate government-owned facilities. Since then, President Bola Tinubu has given the NNPC the order to sell crude oil to Dangote in naira.

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