Dangote Refinery, NUPRC Clash Over Crude Oil Allocation
A brewing conflict between the Dangote Oil Refinery and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) over crude oil allocation escalated on Friday, with both parties trading accusations over the enforcement of the Domestic Crude Supply Obligations (DCSO).
The dispute came to light when the Dangote Group criticized the Nigerian Petroleum Regulatory Commission for allegedly failing to effectively enforce the Domestic Crude Supply Obligations, claiming that the refinery had not received sufficient crude supplies from local sources.
The company argued that it should be able to purchase crude directly from Nigerian producers, as outlined in the Petroleum Industry Act (PIA) of 2021.
In response, the Nigerian Petroleum Regulatory Commission, issued a statement on Friday refuting Dangote’s claims. The commission asserted that it had facilitated the supply of over 29 million barrels of crude oil to the Dangote Refinery between January and June 2024.
The Nigerian Petroleum Regulatory Commission emphasized that it had made significant efforts to ensure that all nine refineries in Nigeria, including Dangote, received their allocated crude despite the challenges of low domestic production.
“The NUPRC, in its effort to enforce Section 109 of the PIA 2021, has developed and gazetted Regulation of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023,” the commission stated. “As part of our strategic commitment to Nigeria’s energy security, 32 million barrels of crude were supplied to Dangote Refinery and other local producers in the first half of 2024.”
According to the NUPRC, the Dangote Refinery alone received 29,047,098 barrels of crude, while other refineries, including Warri, Port Harcourt, and Seplat-WPSOL, received smaller allocations.
However, the Dangote Refinery quickly countered the NUPRC’s claims, maintaining that it had not received the 29 million barrels of crude oil as stated by the commission.
Anthony Chiejina, spokesperson for the Dangote Group, acknowledged the NUPRC’s efforts but insisted that the refinery had only processed one crude cargo facilitated by the commission from a domestic producer. The remaining crude processed at the refinery was purchased from international traders.
“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,” Chiejina said.
He further emphasized the refinery’s position that Nigerian refineries should be allowed to buy crude directly from domestic producers rather than relying on international middlemen. Chiejina expressed disappointment with the NUPRC’s stance, accusing the commission of failing to enforce the DCSO as mandated by the PIA, and using the “sanctity of contracts” as an excuse.
“Unfortunately, the NUPRC has effectively admitted in their statement that they will be unable to enforce the domestic crude supply obligation as specified in the PIA,” Chiejina concluded.
The ongoing disagreement between Dangote Refinery and the NUPRC highlights the broader challenges facing Nigeria’s oil industry, particularly in the enforcement of regulations meant to ensure that domestic refineries have sufficient access to locally produced crude oil.
