The Dangote Refinery accuses International Oil Companies (IOCs) of obstructing crude purchases and inflating prices. Despite the Petroleum Industry Act’s provisions, IOCs demand premiums above official prices. The refinery urges the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to reassess pricing mechanisms to ensure a fair market for domestic refiners.
The Dangote Refinery has accused International Oil Companies (IOCs) of impeding its efforts to procure crude oil for refining. In a statement, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, expressed frustration over the reluctance of IOCs to supply locally produced crude directly to the refinery. Edwin highlighted that these companies often demand a premium above the official prices set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), exacerbating the refinery's operational costs.
Edwin revealed that the refinery had paid a significant premium for crude oil in recent transactions. For instance, in April, the refinery purchased Bonga crude at $96.23 per barrel, which included various premiums on top of the official Brent price. This premium was markedly higher than prices for similar grades like West Texas Intermediate (WTI).
The statement further noted that despite the Petroleum Industry Act (PIA) provisions, which are supposed to facilitate a willing buyer-willing seller relationship, only the Nigerian National Petroleum Corporation Limited (NNPCL) and one other local producer, Sapetro, had sold crude directly to the refinery. Edwin criticized the involvement of international trading arms, which act as middlemen and inflate costs without adding value.
Edwin also addressed comments made by Gbenga Komolafe, NUPRC's CEO, who claimed that it was incorrect to say IOCs were not supplying crude to domestic refiners. Edwin suggested that Komolafe's statement might have been misinterpreted, as the refinery's experiences indicated otherwise. He pointed out that these trading arms often prioritize selling to foreign buyers, complicating the refinery's procurement process.
The Dangote Refinery has urged the NUPRC to reassess the pricing mechanisms to prevent price gouging and ensure a fair market for domestic refiners. The refinery emphasized the need for transparency and adherence to the domestic crude supply obligations to foster a more equitable market environment.
