Dangote Refinery Faces Crude Supply Hurdles, Attributes Issues to NUPRC.
Dangote Refinery, Africa’s largest oil refinery, has reiterated its ongoing struggle to secure sufficient crude oil supply for its operations. Despite claims of increased allocations from the Nigerian National Petroleum Company (NNPC), the refinery continues to face challenges, with the blame directed at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
In a statement issued by Anthony Chiejina, Chief Branding and Communications Officer of Dangote Group, the primary issue lies with NUPRC’s alleged failure to enforce the domestic crude supply obligation. While the NNPC has provided some crude, the volume remains well below what the refinery requires. Dangote has been unable to secure the remaining supply from both the NNPC and International Oil Companies (IOCs).
The refinery’s September requirement is 15 cargoes, but only six have been allocated by the NNPC. Appeals to NUPRC for additional cargoes have been unsuccessful. Furthermore, attempts to procure crude from IOCs have been met with redirection to their international trading arms or refusals due to pre-existing commitments.
As a result, Dangote has been forced to purchase Nigerian crude from international traders at inflated prices, adding an extra $3-$4 million per cargo. The refinery is urging NUPRC to fully enforce the domestic crude supply obligation, as mandated by the Petroleum Industry Act (PIA), to ensure it receives the necessary supply from local production sources.
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