Dangote Petroleum Refinery is struggling to secure enough crude oil supplies under Nigeria’s naira-based sale scheme. Despite agreements with NNPC to supply 385,000 barrels per day, deliveries have been inadequate. Other Nigerian refineries also face challenges accessing naira-priced crude, leaving the scheme's success uncertain.
Dangote Petroleum Refinery is facing significant challenges in securing adequate crude oil supplies under the federal government’s initiative to sell crude in the local currency. Edwin Devakumar, the vice-president of Dangote Industries Limited, revealed that while the Nigerian National Petroleum Corporation (NNPC) had agreed to supply a minimum of 385,000 barrels per day (bpd), the refinery is yet to receive even this reduced amount. According to Devakumar, the deliveries have been "peanuts," falling far short of the refinery's required 650,000 bpd.
The federal government’s naira-denominated crude sales arrangement, which began in October, aims to bolster the local economy by allowing the Dangote refinery to purchase crude in Naira, focusing on local supply. However, as of now, only Dangote's refinery has benefited from this scheme. Other refineries in Nigeria are still unable to access crude oil in Naira, forcing them to continue engaging the government for a resolution.
Since the initiative's launch, Dangote's refinery has only received four cargoes of crude oil under the agreement. On November 21, the refinery made its first purchase of U.S. crude oil after a three-month hiatus, as it seeks to increase production levels. This situation highlights the ongoing struggle for Nigeria's refining sector, which remains heavily reliant on imports and a volatile global market.
