The Dangote Refinery raises concerns over the Nigerian National Petroleum Corporation (NNPC) failing to meet its crude oil supply obligations under the crude-for-naira agreement.
Edwin Devakumar, Vice President of the Dangote Group, states that the NNPC commits to providing a minimum of 385,000 barrels per day (bpd) to the Lagos-based refinery. However, he claims the actual supply falls significantly short of this target.
“We require 650,000 barrels per day, and NNPC promises to deliver at least 385,000 bpd, but they are not even meeting that,” Devakumar remarks, describing the current crude supply as inadequate for the refinery’s operations.
Dangote Refinery Resumes Importation of US Crude Oil
Due to the supply gap, the refinery resumes importing crude oil from the United States after a three-month break. Reports confirm that approximately two million barrels of WTI Midland crude are procured from Chevron Corporation.
- The shipment is scheduled to arrive at the refinery in Lagos next month.
- A supertanker, Azure Nova, is set to transport the crude from the US Gulf Coast, with loading expected to occur around December 5.
- Analysts suggest lower shipping costs may have made US crude oil a competitive option.
Details of the Crude-for-Naira Agreement
The Federal Government introduces the crude-for-naira arrangement to end the practice of selling crude oil to local refineries in foreign currency.
- Under this plan, the 450,000 barrels of crude allocated for domestic use are sold in naira to Nigerian refineries, with the Dangote Refinery as the pilot facility.
- This initiative aims to stabilize fuel prices and ease pressure on the naira-dollar exchange rate.
The Dangote Refinery requires 15 cargoes of crude annually to function optimally, with the NNPC expected to supply four of these cargoes. The crude-for-naira deal officially begins on October 1, 2024.
Despite these measures, the Dangote Refinery emphasizes the urgent need for consistent crude supply to meet its production targets and strengthen Nigeria’s energy sector.
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