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By Adewale Sanyaolu
Dangote Petroleum Refinery has challenged the narrative that it rejected 15.5 million barrels of crude oil offered by local producers in the second quarter of 2026.
The Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, while offering clarification on recent statistics released by the Nigerian Upstream Petroleum Regulatory Commission(NUPRC) on crude allocation argued that, the real problem confronting domestic refining is not the volume of crude nominally allocated to refiners but whether the oil is actually available at commercially viable prices.
The refinery said it remains committed to buying Nigerian crude and supporting the Federal Government’s Domestic Crude Supply Obligation (DCSO), but warned that crude offered at prices above prevailing international benchmarks could undermine the economics of domestic refining and ultimately push up the cost of petroleum products.
Latest data reports from NUPRC indicated that the refinery rejected 15.5 million barrels of crude offered by domestic producers during the second quarter.
Dangote said the figures did not fully capture the circumstances surrounding the crude offers, particularly the distinction between crude that is nominally allocated and volumes that are genuinely available for purchase on competitive commercial terms.
Edwin, said the refinery had consistently experienced difficulties securing adequate volumes of Nigerian crude directly from domestic producers since the implementation of the DCSO framework.
“Our position is straightforward. We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices,” Edwin said.
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He said the refinery must procure crude at prices that support sustainable operations, arguing that the commercial viability of domestic refining is critical to ensuring that petroleum products can be supplied to Nigerians at affordable and competitive prices.
According to him, a significant portion of the refinery’s crude supply under the DCSO arrangement has had to be sourced through International Oil Companies (IOCs) and third parties because of challenges in securing direct supplies from domestic producers.
The additional layers of transactions, he explained, often introduce premiums and other costs that can make Nigerian crude more expensive than alternative supplies available on the international market.
“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining. Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market,” he said.
The refinery stressed that it is not opposed to purchasing Nigerian crude, but wants domestic supplies to be adequate, accessible and competitively priced.
NUPRC in the Q2 DSCO statistics disclosed that the Dangote Refinery required 63 million barrels in Q2 but the producers offered higher volumes of 68.1 million barrels.
It added that the 68.1 million barrels offered to the Dangote Refinery by producers represents 98 per cent of all offered volumes.
“Eventually, 52.6 million barrels were accepted by the Dangote refinery. This implies that the refinery only accepted 78 per cent of what it was offered,”.
