The management of the Dangote Refinery stated on Thursday that it remains firm in its position that oil producers are under-supplying the refinery, which has a capacity of 650,000 barrels per day, located in Lagos.
In a statement, the company clarified that the Nigerian National Petroleum Company Limited (NNPC) only provided 60% of the 50 million barrels it lifted. Despite the refinery’s requirement for 15 cargoes from the NNPC in September, only six were allocated.
The Dangote Refinery also expressed concerns about the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) failure to fully enforce the domestic crude supply obligation.
The company emphasized that it has never accused NNPC of failing to supply crude but is concerned about NUPRC’s reluctance to ensure the refinery receives its full crude requirement from both NNPC and International Oil Companies (IOCs).
For September, despite needing 15 cargoes, NNPC only allocated six, and appeals to NUPRC to secure the remaining cargoes have been unsuccessful. When the refinery approached IOCs operating in Nigeria, they were either redirected to international trading arms or informed that the cargoes were already committed elsewhere.
As a result, the refinery often has 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 Dangote Refinery insists that it has not received a fair deal from oil producers or the NUPRC, which has not fully enforced the obligation to supply local refineries. They continue to urge NUPRC to enforce this obligation as required by the Petroleum Industry Act (PIA).
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