Dangote Refinery Insists No Backtracking on Accusation of Oil Producers’ Reluctance to Supply Crude

Emmanuel Addeh in Abuja

The management of the Dangote refinery yesterday said it had not backtracked on its position that oil producers were under-supplying the 650,000 barrels per day facility located in Lagos.

In a statement, the company maintained that the Nigerian National Petroleum Company Limited (NNPC) only supplied 60 per cent of the 50 million barrels lifted.
According to Dangote refinery, in September, whereas its requirement is 15 cargoes from the national oil company, only six were allocated by the NNPC.
The company also raised concerns over the inability of the industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to fully enforce the domestic crude supply obligation.

“Our attention has been drawn to media reports alleging that the Dangote Refinery has backtracked by acknowledging that NNPC supplied about 60 per cent 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 NUPRC’s reluctance to enforce the domestic crude supply obligation, and ensuring that we receive our full crude requirement from NNPC and the International Oil Companies (IOCs).

“For September, our requirement is 15 cargoes, of which NNPC allocated six. Despite appealing to NUPRC, we’ve been unable to secure the remaining cargoes. When we approached International Oil Companies (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,” the statement added.
According to the Dangote refinery, it was therefore trite that it had not received a fair deal from the oil producers as well as the NUPRC that had not fully enforced the oil producers’ obligation to local refineries.

“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).