Dangote Oil Refinery’s highly anticipated entry into the petrol supply market in July may be delayed due to crude oil scarcity, according to industry insiders.
The 650,000 refinery sited in Lagos, was scheduled to commence operations in July, intending to considerably reduce Nigeria’s reliance on imported petrol.
However, there are growing concerns that a paucity of readily available crude oil would limit Dangote’s capacity to reach its fuel refining ambitions.
The refinery is yet to receive the required volumes of crude oil needed to refine PMS for the July takeoff,” a source in the oil trading business said.
The country manager of Trade Grid, Jide Pratt, who maintains a large network of independent dealers throughout Africa, stated that the Dangote refinery is unlikely to make the July deadline.
Pratt said “The issue of crude supply is still a major issue, and postulations on how the premium motor spirit (PMS) will be sold in USD are unattended to.
“A safe assumption may be August or September at best and December at worst.
“It’s clear that subsidy still exists and the possibility of selling to NNPC is reduced, as it currently has trade account receivables with traders over of 160 days. The Dangote Refinery is a commercial entity and will unlikely toe this line of credit sales with its running cost and interest payments.”
A financial planning expert, Kalu Aja asked why Nigeria, Africa’s largest oil exporter, couldn’t produce enough oil for Dangote.
“If Dangote needs crude, Nigerian National Petroleum Company should support its 20 percent investment by giving Dangote its oil equity,” Aja said.
Publisher of Sweet Crude Reports, Hector Igbikiowubo stated that the purpose of having the NNPC refineries operational is to ensure energy security for the Nigerian state.
“The question now is, how come the NNPC isn’t allotting all of its 445,000 barrels per day to the Dangote Refinery for refining?” Igbikiowubo asked on Channels TV program.
Attempts to contact the chief communication officer of NNPC Ltd, Femi Soneye were unsuccessful since he did not return calls.
NNPC Ltd, which owns 20% of the project, is commonly projected to provide the majority of Dangote’s crude demand. However, this may be farfetched.
