The Dangote Refinery has clarified its stance on crude oil supply issues, emphasizing that its concerns lie with regulatory enforcement rather than supply from the Nigerian National Petroleum Company Limited (NNPC Ltd).
Anthony Chiejina, Group Chief Branding and Communications Officer for Dangote, addressed recent media reports in a statement released Thursday.
He stated, “We have never accused NNPC of not supplying us with crude. Our concern has always been NUPRC’s reluctance to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs.”
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has been the focus of Dangote’s frustration. According to Chiejina, the company’s September requirement was 15 cargoes, of which NNPC allocated six.
“Despite appealing to NUPRC, we’ve been unable to secure the remaining cargoes,” he explained.
This shortfall has forced Dangote to seek alternative sources, often at a premium. “When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed,” Chiejina said.
“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.”
The statement comes amid ongoing tensions between Dangote Group and Nigeria’s petroleum regulators. In June, Dangote accused some international oil companies of sabotaging the plant’s operations by refusing to supply crude or offering it at inflated prices.
The dispute has caught the attention of the Nigerian government. Last month, the Federal Executive Council (FEC) directed NNPC Ltd to engage with Dangote refinery and other local refineries to resolve the crude oil sale dispute.
The Explainer reported that the FEC also mandated that such transactions be conducted in naira.
As Dangote Refinery approaches steady-state operations, its crude oil requirements are substantial. Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), recently disclosed that the refinery needs approximately 15 crude cargoes per month, amounting to an annual supply cost of $13.5 billion.
With NNPC Ltd committing to supply four crude oil cargoes monthly, Dangote must source the remainder from international traders.
The company continues to urge NUPRC to “fully enforce the domestic crude supply obligation as mandated by the PIA [Petroleum Industry Act].”