The Dangote Refinery will receive six million barrels of crude oil from the Nigerian National Petroleum Company Limited, according to a statement made on Thursday.
The PUNCH reported that the Federal Government acknowledged that the absence of supplies to Dangote was embarrassing and attributed it to low oil production which was delaying the opening of the refinery along with five others.
However, insiders at the NNPCL said that the oil company was scheduled to supply six million barrels of crude oil to the refinery in December—a move that may be seen as a response to the report.
“NNPC Ltd is expected to allot six million barrels of crude oil to Dangote Refinery in December 2023 a big step towards expanding domestic refining and obtaining energy security,” a top oil company official said, requesting anonymity.
The official continued, “This development came as plans have since solidified for the national oil company and the refinery to sign a sales and purchase agreement, which is scheduled to occur in Abuja shortly.”
In the meantime, sources close to both sides verified that the transaction was solely commercial in nature and had nothing to do with selling at deeply discounted prices, as several media outlets had claimed.
Domestic crude oil supply requirements to refineries, such as the Dangote Refinery, NNPCL refineries in Port-Harcourt, Warri, and Kaduna, and modular refineries, are outlined in Section 109 of the Petroleum Industry Act (2021).
The provision further stipulates that willing buyers and willing suppliers shall supply crude oil to the domestic market.
The Dangote refinery is currently partially owned by the NNPCL, which also plans to begin delivering crude oil to the plant.
The October output shortfall marked the second time in 2023 that Dangote Refinery has given Africans, particularly Nigerians hope that fuel imports may eventually come to an end.
But since production hasn’t started, Nigeria would have to import fuel until NNPCL starts supplying the plant with crude oil in December of this year.
According to the report, Nigeria’s indigenous refineries that would have assisted in refining the commodities were running out of crude oil as the country continued to import refined petroleum products.
Industry sources said that approximately five more modular refineries were prepared to start producing refined petroleum products, but they were unable to do so due to a lack of crude oil.
