Dangote Refinery Clarifies Crude Supply Issues, Calls for Enforcement of Domestic Supply Obligation

The Dangote Refinery has issued a statement to clarify recent media reports suggesting that the company backtracked on claims regarding crude oil supply from the Nigerian National Petroleum Corporation (NNPC). The refinery asserts that it has never accused NNPC of failing to supply crude oil but emphasizes that the enforcement of domestic crude supply obligations remains a critical issue.

Anthony Chiejina, the Group Chief, Branding and Communications Officer of Dangote Industries, addressed the concerns, stating, "Our concern has always been that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is pushing, but International Oil Companies (IOCs) are not following the instructions to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs."

For the month of September, the refinery required 15 cargoes of crude oil, out of which NNPC allocated six. Despite appeals to NUPRC and their intervention, the refinery has been unable to secure the remaining cargoes. Chiejina noted that when the refinery approached IOCs operating in Nigeria, they were either directed to the IOCs' international trading arms or informed that the cargoes were already committed elsewhere.

As a result, the refinery has been compelled to purchase Nigerian crude oil from international traders at a premium of $3-$4 per barrel, translating to an additional $3-$4 million per cargo. This situation has placed a significant financial burden on the refinery.

"We, therefore, still insist 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). It is a law, and they just need to comply," Chiejina reiterated.

The statement underscores the need for strict adherence to the PIA's provisions to ensure that domestic refineries like Dangote can operate efficiently without bearing the extra costs associated with sourcing crude oil from international markets.