Dangote to NUPRC: Enforce PIA direct crude sale to local refineries

Dangote to NUPRC: Enforce PIA direct crude sale to local refineries 

 

Dan­gote Petroleum Re­finery has said refineries in Nigeria should be allowed to buy crude directly from the companies that pro­duce it in the country rather than from international middlemen.

This, the company said, is in line with the provision of the Petroleum Industry Act (PIA) of 2021.

It therefore urged the Nigerian Upstream Petroleum Regulatory Commis­sion (NUPRC) to enforce the do­mestic crude supply obligation as specified in the PIA.

Spokesperson for the Dangote Group, Anthony Chiejina, said this last night.

He 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 has 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.”

Chiejina was reacting to NUPRC’s statement that it had facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals.

He said, “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.”

Dan­gote refinery had insisted that it was not yet getting enough crude re­quired for the effective optimi­sation of its refinery from the Nigerian National Petroleum Corporation Limited (NNPCL).

The refinery management, in a release signed said that “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.”

Chiejina clarified that Dangote company had never accused NNPC of not supplying 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,” he said.

He added, “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.

“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.”