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.
But less than two months after its commencement, the plan may have faltered, making the refinery seek crude purchase from the United States.
The $20bn Lekki-based plant aims to compete with European refiners when operating at full capacity but it has struggled to secure sufficient crude supplies to run optimally.
While Devakumar declined to give specific figures, he described deliveries from NNPC under the scheme as “peanuts”.
Confirming this situation, the acting Executive Director of the Crude Oil Refinery-Owners Association of Nigeria, Mathins Obaze, said Dangote remains the only recipient out of eight operational refineries in Nigeria to have benefited from the naira-denominated crude sale arrangement.
“Members are still unable to access crude in naira and are currently engaging the government for a resolution,” Obaze said.
The reason for the shortfall was not immediately clear. NNPCL did not respond to a request for comment.
The Dangote refinery in August urged the oil regulator, the Nigerian Upstream Petroleum Regulatory Commission to enforce a rule that compels oil producers to supply local refineries.
NUPRC did not respond to a request for comment on the matter.
Dangote, with a current capacity of 425,000 bpd and a year-end target of 85 per cent operational capacity, has turned to international markets for supplies.
It purchased two million barrels of US WTI Midland crude on Wednesday, its first US crude purchase since August, according to trade sources and shipping data.
Meanwhile, NNPC is pursuing new markets for its crude oil. The company was in London on Wednesday seeking term customers for its new Utapate crude oil grade.