Dangote Refinery has raised concerns over crude oil supply delays despite allocations.
In a press statement released on August 9th, 2024, the Dangote Petroleum Refinery and Petrochemicals expressed concerns over delays in receiving crude oil cargoes despite an allocation of 29 million barrels from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The statement, signed by Anthony Chiejina, Group Chief, Branding and Communications Officer, highlighted the refinery’s frustrations with the current supply chain, particularly the role of international traders.
“We would like to thank [NUPRC] for this allocation but at the same time let them know that we are yet to receive these cargoes,” the statement reads. It further explains that aside from a term supply agreement bilaterally negotiated with the Nigerian National Petroleum Corporation (NNPC), the refinery has only been able to purchase one crude cargo from a domestic producer. “The rest of the cargoes we have processed were purchased from international traders,” the statement continued.
The refinery reiterated its position that Nigerian refineries should be able to purchase crude directly from domestic producers, as specified in the Petroleum Industry Act (PIA). “All we are asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen,” the statement emphasized.
However, the Dangote Refinery expressed disappointment in the NUPRC’s recent admission that enforcing domestic crude supply obligations, as mandated by the PIA, might be challenging. “Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation… citing ‘sanctity of contracts’ as an excuse,” the statement concluded.
The situation raises questions about the efficacy of the PIA and its intended benefits for the Nigerian oil industry, especially regarding the ease of access to domestic crude for local refineries.
