Dangote Group Unable To Get Full Supply of Crude Oil From Domestic Producers

Dangote Group has stated that it is still unable to get a full supply of crude oil from domestic producers.

 

NewsOnline Nigeria reports that the Dangote Refinery reiterated that they are still unable to secure their full crude requirement from domestic production and urged the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) to enforce the domestic supply obligation as mandated by the Petroleum Industry Act (PIA). 

 

This Nigeria news platform understands that the Dangote Group has alleged that it used to buy Nigeria crude oil from international traders at an additional premium of $3 to $4 per barrel.  

 

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The Group stated this in a press statement signed by its Chief Branding and Communications Officer, Anthony Chiejina where it clarified media reports that NNPC had supplied its quota of crude oil to the Dangote oil refinery.  

According to the statement, the company noted that International Oil Companies (IOCs) are not complying with oil supply guidelines from the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).  

 

It explained that it had to buy the same Nigerian crude oil from the IOCs international trading arm at a premium of up to $3 to $4. 

 

The statement reads, “Our attention has been drawn to media reports alleging that the Dangote Refinery has backtracked by acknowledging that NNPC supplied about 60% of the 50 million barrels we lifted.”

 

“To clarify, we have never accused NNPC 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.” 

 

“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 and urge NUPRC to fully enforce the domestic crude supply obligation as mandated by the PIA. It is a law, and they just need to comply.” 

 

The Dangote Refinery stated that for September, their requirement was 15 cargoes, of which NNPC had allocated six. Despite their appeals to NUPRC and the intervention provided, they had been unable to secure the remaining cargoes.  

 

They further mentioned that when they approached IOCs producing in Nigeria, they were redirected to the international trading arms of these companies or were informed that the cargoes were already committed elsewhere. 

 

NewsOnline Nigeria recalls that the Dangote refinery has been having a running battle with authorities in Nigeria’s oil sector over the supply of crude oil to the refinery. However, the Federal Executive Council (FEC) a few weeks ago approved the sale of crude oil to the refinery in Naira rather than USD.  

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) mandates oil producers in the country to supply specific quantity of crude oil to local refineries across the country. This is in accordance with the Petroleum Industry Act (PIA). This mandate is under the Domestic Crude Supply Obligation (DCSO).