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Officials from the Dangote Petroleum Refinery and the Federal Government confirmed on Tuesday that the refinery has successfully received four shipments of crude oil from the Nigerian National Petroleum Company Limited as part of the naira-for-crude sale agreement.
It has been reported that the refinery received the four cargoes of crude oil within the past three weeks, during which the government began selling crude to domestic refineries in the local currency.
According to knowledgeable sources about the local crude sale arrangement, the refinery is still expecting to receive more cargoes of crude oil from NNPCL, the body that manages Nigeria’s hydrocarbon resources.
They also announced that the Lekki-based plant, valued at $20 billion, is poised to begin selling refined Premium Motor Spirit, commonly known as petrol, directly to domestic retailers.
A source connected to the Technical Subcommittee on Domestic Sale of Crude Oil in Local Currency, speaking on the condition of anonymity due to a lack of press authorization, confirmed to reporters that “the Dangote refinery will see additional crude cargo deliveries in the coming weeks.”
The official disclosed that the programme started with the Dangote refinery as the only petrol-producing facility in Nigeria at the moment.
Speaking with our correspondent, a senior official of the refinery confirmed the development, saying the first phase of the naira-crude sale agreement would last for six months unless it is renewed by the Federal Government.
The official said she could not tell the cost of the crude oil per barrel.
“The naira-for-crude deal has started. The Dangote refinery has received four cargoes so far and we are still expecting more. The four cargoes have been delivered to the refinery within the past three weeks. We are still expecting more cargo in the coming week.
“Don’t forget that this first phase of the naira-crude sale is just for six months. The government may decide to renew it at the end of the first six months and they may decide not to. So, we don’t know what will happen yet after the first six months.”
Recall that the 650,000 barrels per day capacity refinery was greeted by crude challenges when it began operations some months ago.
The President of the Dangote Group, Alhaji Aliko Dangote, had cried out, saying some international oil companies were planning to sabotage the investment by refusing to supply crude.
The Dangote Group had alleged that the IOCs insisted on selling crude oil to its refinery through their foreign agents.
Read also: Dangote Confirms Out-Of-Court Deal With NNPCL On Imports
According to the statement, the local price of crude oil is poised for further increases due to trading arms providing cargoes at a premium of $2 to $4 per barrel over the official price. This situation could exacerbate inflationary pressures on consumers and businesses alike.
The group alleged that foreign oil producers seem to prioritize selling the crude oil they extract in Nigeria to Asian nations, raising concerns about the long-term impacts on the Nigerian economy and local oil sector development.
Even after the Nigerian Upstream Petroleum Regulatory Commission stepped in during July, the group argued that the IOCs are still actively hindering the refinery’s operations. This obstruction calls into question the effectiveness of regulatory oversight in fostering a more conducive environment for local refining initiatives
The Vice President, Oil & Gas, Dangote Industries Limited, Mr Devakumar Edwin, said, “If the Domestic Crude Supply Obligation guidelines are diligently implemented, this will ensure that we deal directly with the companies producing the crude oil in Nigeria as stipulated by the Petroleum Industry Act.”
Edwin argued that the IOCs in Nigeria have consistently thwarted the company’s attempts to source locally-produced crude for its refining process. This ongoing obstruction not only complicates the refinery’s operational needs but also hinders broader efforts to boost Nigeria’s oil production capabilities.
He emphasized that when the trading arms presented cargoes to the oil company, they were frequently priced at a $2 to $4 per barrel premium over the official rates established by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). This pricing discrepancy raises concerns about the cost implications for local operators.
