Fuel Shortage Warning: Dangote Blasts NNPCL For Under-Delivering On Crude Oil Supply

Fuel Shortage Warning: Dangote Blasts NNPCL For Under-Delivering On Crude Oil Supply

The Dangote Petroleum Refinery has expressed concerns over the Nigerian government’s failure to meet its commitment to supply crude oil under the naira-for-crude program. Dangote Industries Vice President, Devakumar Edwin, stated that the refinery has only received a fraction of the agreed crude oil volume from the...READ MORE…

Nigerian National Petroleum Company Limited (NNPCL), which is insufficient to meet production needs.

Edwin told Reuters that while NNPCL promised to deliver 385,000 barrels per day (bpd) starting in October, the actual deliveries have fallen far short of that target. “We need 650,000 bpd. NNPCL agreed to supply a minimum of 385,000 bpd, but they haven’t even come close to that,” he said.

The naira-for-crude initiative, launched in July to alleviate foreign exchange pressures by allowing local refineries to purchase crude oil in naira, has yet to fulfill its promise. Sources informed The PUNCH that although four crude oil shipments have reached Dangote’s refinery, several more are delayed.

In response, Dangote is considering alternative sources of crude, including imports from the United States. The refinery recently secured two million barrels of U.S. WTI Midland crude oil—its first purchase from international markets since August—highlighting the challenges posed by domestic supply shortages.

Despite being built to compete with European refineries, Dangote’s $20 billion refinery in Lekki is operating below its full capacity of 425,000 bpd, with a target to reach 85% capacity by the end of the year.

Edwin criticized the deliveries from NNPCL as “peanuts,” emphasizing the significant gap between the refinery’s crude oil requirements and the volumes supplied.

Mathins Obaze, Acting Executive Director of the Crude Oil Refinery-Owners Association of Nigeria, confirmed that Dangote’s refinery is the only one benefitting from the naira-for-crude arrangement among the eight operational refineries in the country. Many other members are still unable to access crude oil under the initiative and are currently negotiating with the government for a resolution.

The reasons behind the crude supply shortfall remain unclear, with both NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declining to comment. Meanwhile, NNPCL is exploring new international markets for its crude, recently seeking term customers in London for its newly introduced Utapate crude grade.