Dangote Refinery Renews Call for Direct Crude Supply
By Patience Ikpeme
Dangote Petroleum Refinery has intensified its demand for direct access to Nigerian crude oil, accusing the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of failing to enforce the provisions of the Petroleum Industry Act (PIA).
The refinery, in a statement issued by its spokesperson, Anthony Chiejina, expressed gratitude for the 29 million barrels of crude oil allocated to it by NUPRC but maintained that it has yet to receive these cargoes.
Chiejina noted that while the refinery has a bilateral agreement with the Nigerian National Petroleum Company Limited (NNPCL) for crude supply, NUPRC’s role in facilitating direct purchases from domestic producers has been minimal, with only one cargo secured through the commission’s intervention thus far.
The crux of the refinery’s complaint lies in the PIA’s stipulation that refineries in Nigeria should procure crude directly from domestic producers rather than through international middlemen. However, Dangote claims that NUPRC has admitted its inability to enforce this provision, citing existing contracts as an obstacle.
“All we are asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen,” Chiejina asserted. “This is clear in the PIA.”
The refinery has previously highlighted challenges in securing adequate crude oil for optimal operations, a situation it attributes to NUPRC’s reluctance to enforce the domestic supply obligation. This, according to Dangote, has forced the refinery to purchase Nigerian crude from international traders at a premium of $3-$4 per barrel, resulting in additional costs of $3-$4 million per cargo.
With a September requirement of 15 cargoes, of which only six have been allocated by NNPCL, Dangote has underscored the urgent need for increased domestic crude supply. Attempts to procure the shortfall from International Oil Companies (IOCs) have been met with redirections to international trading arms or claims of committed cargoes.
The refinery’s persistent outcry has raised concerns about the impact on its operations and the potential implications for Nigeria’s refining capacity and fuel supply.
