Dangote Refinery Says Oil Producers Are Holding Back on Crude Supply

The management of Dangote Refinery reiterated on Thursday that it remains committed to its stance on the under-supply of crude oil to its 650,000 barrels per day facility in Lagos, despite recent media reports.

In a statement, the company clarified that the Nigerian National Petroleum Company Limited (NNPC) supplied only 60% of the 50 million barrels allocated to the refinery.

Dangote Refinery emphasized that while it required 15 cargoes from the national oil company in September, only six were provided by the NNPC.

The refinery also expressed concerns over the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) inability to fully enforce the domestic crude supply obligation, a key issue affecting the refinery’s operations.

“Our attention has been drawn to media reports suggesting that Dangote Refinery has reversed its position by acknowledging that NNPC supplied about 60% of the 50 million barrels we lifted. To clarify, we have never accused NNPC of failing to supply us with crude,” the statement read.

“Our concern has always been with NUPRC’s reluctance to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the International Oil Companies (IOCs).

For September, our requirement is 15 cargoes, of which NNPC allocated six. Despite our appeals to NUPRC, we have been unable to secure the remaining cargoes.”

The refinery further noted challenges in sourcing crude from International Oil Companies operating in Nigeria. “When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or informed us that their cargoes were already committed elsewhere.

As a result, we often have to purchase the same Nigerian crude from international traders at an additional premium of $3-$4 per barrel, translating to $3-$4 million per cargo,” the statement added.

Dangote Refinery concluded by stressing that it has not received fair treatment from both the oil producers and the NUPRC, which has not fully enforced the obligation to supply local refineries.

“We, therefore, maintain our position that we are unable to secure our full crude requirement from domestic production and urge NUPRC to fully enforce the domestic crude supply obligation as mandated by the Petroleum Industry Act (PIA),” the statement concluded.