The Dangote Petroleum Refinery has expressed concerns that the Federal Government is not meeting its commitment to supply crude oil under the naira-for-crude initiative.
Devakumar Edwin, Vice President of Dangote Industries Limited, revealed that the Nigerian National Petroleum Company Limited (NNPCL) has delivered only a small portion of the agreed crude oil, insufficient for the refinery’s operations.
Edwin told Reuters that the NNPCL had promised to provide at least 385,000 barrels per day (bpd) since the initiative started in October, but the deliveries have fallen short of this target.
He emphasized that the refinery requires 650,000 bpd, but NNPCL’s deliveries have been much lower than expected.
Launched in July, the naira-for-crude program was designed to alleviate foreign exchange challenges by allowing local refineries to purchase crude oil using naira.
Despite this, sources have reported that while Dangote refinery has received four crude shipments, additional deliveries are still awaited.
As a result, the refinery is considering sourcing crude from international markets, including the United States.
Recently, Dangote purchased two million barrels of US WTI Midland crude oil, marking its first such purchase since August.
This move highlights the refinery’s need for foreign supply to make up for domestic shortages.
The $20 billion refinery, located in Lekki, aims to compete with European refineries but is currently operating below its full capacity of 425,000 bpd, with plans to reach 85% capacity by year-end.
Edwin described the crude deliveries from NNPCL as inadequate, calling them “peanuts” in light of the refinery’s needs.
Mathins Obaze, acting Executive Director of the Crude Oil Refinery-Owners Association of Nigeria, confirmed that Dangote is the only refinery benefiting from the naira-for-crude arrangement.
He noted that other refineries are still unable to access crude through the program and are negotiating with the government for solutions.
The reasons for the shortfall in crude deliveries remain unclear, with both NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declining to comment.
Dangote has previously urged NUPRC to enforce regulations requiring oil producers to prioritize local refineries.
Meanwhile, NNPCL is actively seeking new international markets for its crude oil, recently targeting term customers in London for its newly launched Utapate crude oil grade as part of its broader strategy to tap into global opportunities despite ongoing domestic supply challenges.