Dangote urges NUPRC to implement PIA 2019 on crude supply to local refineries

*The Management of Dangote Petroleum Refinery urges the Nigerian Upstream Petroleum Regulatory Commission to enforce the domestic crude supply obligation as specified in the country’s Petroleum Industry Act 2019 by allowing local oil refineries to buy crude directly from the oil-producing companies in Nigeria ‘rather than from international middlemen’

Alexander Davis | ConsumerConnect

The Management of Dangote Petroleum Refinery has urged the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce the domestic crude supply obligation as specified in the Petroleum Industry Act (PIA).

The company, said this in a statement, insisted that refineries in Nigeria should be allowed to buy crude directly from the oil companies that produce it in the country rather than from international middlemen, as enshrined in the Nigerian PIA Act.

Mr. Anthony Chiejina, Group Chief, Branding and Communications Officer at Dangote Group, said Friday, August 9, 2024, stated: “We are in receipt of NUPRC’s statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals, we would like to thank them for this allocation, but at the same time we wish to let them know that we are yet to receive these cargoes.

“Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.”

Chiejina also said: “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. This is specified in the PIA.

“Unfortunately, the NUPRC have effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA, citing ‘sanctity of contracts’ as an excuse.”

It is recalled that the Management of the Dangote Petroleum Refinery recently insisted that it was not yet getting enough crude required for the effective optimisation of its refinery from the Nigerian National Petroleum Company Limited (NNPCL).

The Refinery Management, in a release by Chiejina had restated “we therefore still insist that we are unable to secure our full crude requirement from domestic production and urge the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), to fully enforce the domestic crude supply obligation as mandated by the PIA.”

The Group’s Spokesman further clarified that his company has never accused NNPC of not supplying the Dangote Petroleum Refinery with crude.

“Our concern has always been NUPRC’s reluctance to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs,” stated Chiejina.

He further explained that “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 IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed.”

The Group Chief, Branding and Communications Officer added: “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.”