The Lagos-based mega Dangote refinery has accused the Nigerian National Petroleum Corporation (NNPC) of failing to meet its crude oil supply obligations under the naira-for-crude agreement.
Edwin Devakumar, the Vice President of the Dangote Group, disclosed this in a statement reported by Reuters.
Devakumar explained that the national oil company had committed to supplying the refinery with a minimum of 385,000 barrels per day (bpd) under the crude-for-naira deal.
However, he alleged that the NNPC is falling short of this commitment.
According to Reuters, Devakumar characterized the volume of crude currently supplied by NNPC Limited as “peanut,” though he did not specify the exact amount.
“We need 650,000 barrels per day, and NNPC Ltd agreed to supply a minimum of 385,000 bpd, but they are not even delivering that,” Devakumar stated.
Dangote resumes importation of Crude from the US
In an earlier report, Nairametrics observed that the $20 billion Dangote Refinery has resumed importing crude oil from the United States after a three-month pause.
- The refinery reportedly purchased approximately two million barrels of WTI Midland crude from Chevron Corp., according to anonymous sources familiar with the transaction.
- The shipment Is scheduled to arrive at the 650,000 bpd petrochemical plant in Lagos next month.
- Shipping records reveal that Chevron contracted the supertanker Azure Nova to transport the crude from the US Gulf Coast to the refinery, with loading expected around December 5.
- While the reasons for the return to US imports remain unclear, a recent report by Sparta Commodities suggests that lower shipping costs may have made US oil more competitive in Europe.
Backstory
Nairametrics earlier reported that on July 29, the Federal Executive Council approved President Tinubu’s proposal to end the sale of crude oil by NNPC to local refineries in foreign currency.
- Under the new arrangement, the 450,000 barrels of crude oil allocated for domestic consumption will now be sold in Naira to Nigerian refineries, with Dangote Refinery serving as the pilot project.
- This initiative aims to stabilize both the pump price of refined fuel and the dollar-naira exchange rate.
- According to a recent report, Dangote Refinery requires 15 cargoes of crude oil annually, and the Nigerian National Petroleum Corporation (NNPC) will supply four of these cargoes.
The Minister of Finance, Wale Edun, later announced that the transaction would officially commence on October 1, 2024.