The Dangote Petroleum Refinery says it is facing a major setback in its operations due to the Federal Government’s inability to fulfill its commitment to supply crude oil under the naira-for-crude initiative.
According to Devakumar Edwin, Vice President of Dangote Industries Limited, the refinery has only received a fraction of the agreed-upon crude oil volume from the Nigerian National Petroleum Company Limited, NNPCL.
Edwin says the NNPCL had pledged to supply at least 385,000 barrels per day, bpd, since the program’s launch in October.
However, the deliveries have been significantly below that target, with Edwin stating that the refinery needs 650,000 bpd to operate efficiently.
Despite receiving four crude oil shipments, the refinery is still awaiting further deliveries, prompting it to consider alternative crude supply options, including imports from the United States.
Cyber Reporters reports that the naira-for-crude initiative was introduced in July to ease foreign currency pressures by allowing local refineries to purchase crude oil in naira.
However, the program has faced challenges, with the Dangote refinery operating below its full capacity of 425,000 bpd.
The refinery aims to reach 85% capacity by the end of the year.
Industry insiders have expressed concerns about the refinery’s reliance on international markets amid domestic supply challenges.
The refinery’s decision to procure two million barrels of US WTI Midland crude highlights the need for alternative supply options.
The Crude Oil Refinery-Owners Association of Nigeria has confirmed that Dangote is the sole refinery benefitting from the naira-for-crude deal among the eight operational refineries in the country.
However, most members are still unable to access crude under the initiative and are in discussions with the government for a resolution.
