NNPC to Supply Dangote Refinery with Six Million Barrels of Crude

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The Nigerian National Petroleum Company Limited (NNPCL) announced its intention to supply six million barrels of crude oil to the Dangote Refinery. 

This development comes as a response to previous reports of crude oil shortages delaying the commencement of the Dangote refinery and several others. 

READ ALSO: Dangote, PH Refineries, Others Won’t Alter The Cost Of Fuel -NNPCL

The Nigerian government acknowledged the shortfall in oil supply to the Dangote refinery, attributing it to low oil production and labeling it as shameful.

NNPCL sources revealed their plans to deliver six million barrels of crude oil to the refinery in December 2023, aiming to boost domestic refining and enhance energy security. 

An official from the oil firm stated that a sales and purchase agreement between NNPCL and the refinery was being finalized, with the signing ceremony set to occur in Abuja.

It’s important to note that the deal between NNPCL and the Dangote Refinery is purely commercial and not associated with discounts or selling at reduced prices, as speculated by some media outlets. 

The Petroleum Industry Act (2021) Section 109 mandates domestic crude oil supply to refineries, including the Dangote Refinery, on a willing buyer and willing supplier basis. NNPCL has already taken an equity stake in the Dangote refinery and will commence crude oil supply to the facility.

As previously mentioned, the absence of crude oil supply to local refineries, including the multi-billion dollar Dangote Refinery, has resulted in the halt of refined petroleum product production at these facilities. 

Furthermore, the Dangote refinery, with a daily capacity of 650,000 barrels, failed to meet its production target for October, marking the second instance in 2023 where hopes for ending petrol imports in Africa, particularly Nigeria, were raised but remained unfulfilled.

The failure to commence production signifies that Nigeria will continue to depend on fuel imports until the Nigerian National Petroleum Company Limited (NNPCL) initiates the supply of crude oil to the Dangote Refinery, as planned for December this year. 

The report also highlighted the challenges faced by Nigeria, which, despite ongoing imports of refined petroleum products, has left its domestic refineries deprived of the crude oil necessary for refining.

Additionally, approximately five modular refineries were prepared to start producing refined petroleum products but were unable to do so due to the lack of available crude oil. 

Furthermore, the Dangote Refinery in Lekki, Lagos, has not yet received the requisite volumes of crude oil essential for refined product manufacturing.

 

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