Dangote Accuses International Oil Companies of Crude Oil Price Manipulation, Claims Sabotage of Refinery.
Edwin made these assertions during a session with Energy Editors at a one-day training program organized by the Dangote Group. He claimed that the IOCs are obstructing the refinery’s efforts to purchase local crude by inflating premium prices above market rates. This tactic has forced the refinery to import crude from distant countries like the United States, leading to significantly higher costs.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is doing its best to allocate crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy local crude,” Edwin stated. “It would be recalled that the NUPRC recently met with crude oil producers and refinery owners in Nigeria to ensure full adherence to Domestic Crude Oil Supply Obligations (DCSO) under section 109(2) of the Petroleum Industry Act (PIA). It seems that the IOCs’ objective is to ensure that our Petroleum Refinery fails.”
He added, “They either demand ridiculous premiums or simply state that crude is not available. At some point, we paid $6 above the market price. This has forced us to reduce our output and import crude from countries as far away as the US, increasing our cost of production.”
IOCs Failing to Meet Local Demands
Under the Petroleum Industry Act (PIA), IOCs are required to meet local demands by supplying crude oil to refineries in the country before exporting. The Act, signed under Buhari’s administration, has been recently reinstated by the NUPRC.
According to the Commission, IOCs must sell to local refineries before exporting to foreign countries. The NUPRC aims to act as a mediator between local refiners and producers when crude supply agreements cannot be finalized, arranging sales purchase agreements based on a willing-buyer, willing-seller model.
However, in a recent interview with CNN, Aliko Dangote, chairman and president of Dangote refinery, stated that the IOCs are not complying with the mandate and are refusing to sell crude oil for processing. “The NNPC is doing its best, but some of the IOCs are struggling to give us crude. Everybody is used to exporting, and nobody wants to stop exporting,” Dangote said.
The Dangote refinery, based in Lagos, Nigeria, is the largest petroleum refinery in Africa and Europe. With a refining capacity of 650,000 barrels per day, the refinery is expected to supply petroleum products not only to Nigeria but also to other African countries that currently depend on Europe for their energy consumption.
According to the latest reports, the $20 billion refinery has started exporting jet fuel to Europe. While the refinery has begun supplying diesel to the local market, Dangote mentioned that a slight delay has led to the postponement of the full supply date to the middle of next month.
