Victor Ezeja
Dangote Refinery has reiterated that it is not getting enough crude oil supply from producers in the country.
The company which has been facing the challenge of insufficient supply since it commenced operations in January this year, said it has not been able to get supply from International Oil Companies (IOCs) operating in the country, making it to spend an additional $3-$4 premium per barrel, which translates to $3-$4 million per cargo, buying the same Nigerian crude from international traders.
Join our WhatsApp ChannelThe company made this known while reacting to reports alleging that the refinery has backtracked by acknowledging that the Nigerian National Petroleum Company Limited (NNPCL) supplied about 60 per cent of the 50 million barrels it had lifted.
The NNPCL GCEO, Mele Kyari, who appeared before the Senate committee investigating economic sabotage was said to have mentioned that the national oil company made the supply to Dangote.
READ ALSO: Dangote Refinery’s Supplies Will Disrupt Europe’s Oil & Gas Industry – OPEC
Clarifying the assertion, the company in a statement by the Dangote Group Chief Branding and Communications Officer, Anthony Chiejina, said it has never accused NNPCL of not supplying it crude but its concern has been that the IOCs are not adhering to instructions by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) on domestic supply.
It said: “To clarify, we have never accused NNPCL of not supplying us with crude. Our concern has always been that NUPRC is pushing but 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 September, our requirement is 15 cargoes, of which NNPC allocated six. Despite appealing to NUPRC and their intervention, we’ve been unable to secure the remaining cargoes. When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed.
“Consequently, we often purchase the same Nigerian crude from international traders at an additional $3-$4 premium per barrel which translates to $3-$4 million per cargo.
“We, therefore still insist that we are unable to secure our full crude requirement from domestic production.”
READ ALSO: Dangote-Regulator Face-off: We Didn’t Sabotage Any Refinery – NNPCL Boss
The company urged NUPRC to fully enforce the domestic crude supply obligation as mandated by the Petroleum Industry Act (PIA) 2021, adding that it is a law that the IOCs must comply with.
Prime Business Africa had reported that the Dangote Group’s management alleged that the IOCs were frustrating crude supply to the $20 billion world largest single-training refinery.
It said the situation made the company to be spending about $4 per barrel, above NUPRC’s official price.
The 650,000-capacity refinery has been producing diesel and jet fuel supplied locally and exported abroad.
The group chairman and Africa’s richest man, Aliko Dangote, had last month said the refinery will commence supply of petrol to marketers this August.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
