The turmoil in Nigeria’s oil and gas sector shows no signs of easing as Dangote Refinery has reported that it has not received the 26 million barrels of crude oil allegedly allocated to it by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
On Friday, Anthony Chiejina, the spokesperson for Dangote Group, issued a statement responding to claims made by NUPRC.
The commission had announced that it facilitated an allocation of 26 million barrels of crude oil to Dangote Refinery for the first quarter of 2024. NUPRC also revealed plans to review its Domestic Crude Supply Obligation Regulations 2023, which govern how crude oil is distributed within Nigeria.
However, Dangote Refinery has made it clear that it has yet to receive the allocated crude oil. Chiejina’s statement expressed gratitude for the allocation but also pointed out the reality of the situation.
“We would like to thank them for this allocation but at the same time let them know that we are yet to receive these cargoes,” he said.
According to Dangote Refinery, NUPRC has only facilitated the purchase of one cargo of crude oil from a domestic producer.
The rest of the crude oil processed by the refinery has been bought from international traders.
This highlights a significant gap between the promised allocation and the actual delivery.
The company further called on NUPRC to ensure the implementation of the Petroleum Industry Act (PIA), which includes provisions for domestic crude oil obligations.
“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,” the statement added.
The dispute between Dangote Refinery and NUPRC is part of a larger picture of struggles within Nigeria’s oil sector.
Dangote, Africa’s richest man, has been embroiled in a squabble with the Nigerian National Petroleum Corporation Limited (NNPCL) and other oil regulators.
Reports circulating online, including statements from Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), suggested that local refineries, including the Dangote refinery, were producing inferior products compared to imports.
The ongoing feud also highlights a broader issue: despite President Bola Tinubu’s recent directive for the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to local refineries, including Dangote Refinery, in Naira, this directive has yet to be implemented. The lack of progress on this front adds to the growing frustration within the sector.
The problems facing Dangote Refinery and other local refineries are indicative of deeper issues in Nigeria’s oil and gas industry:
Experts there is a significant disconnect between policy announcements and their actual implementation.
