Dangote refinery and other local refineries have raised their crude oil requirements from Nigeria’s oil producing companies to 597,000 for the next five months.
This is according to a statement from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and reported by Reuters on Monday.
According to the report, Nigeria’s refineries have increased their domestic crude requirements for the second half of 2024 to 597,700 barrels per day, up from 483,000 barrels per day in the first half.
NUPRC also confirmed that the oil companies were only able to provide 177,777 bpd to the refineries in the first six months of the year, way below the requirements of the refineries.
The increasing crude requirements of local refineries, coupled with the challenges oil producers face in meeting demand, have created tensions between the 650,000-bpd Dangote Refinery and the regulator.
NURPC’s failure to enforce PIA
Nairametrics earlier reported that the Dangote Refinery accused the NUPRC of failing to enforce the Petroleum Industry Act (PIA) in relation to the domestic supply of crude oil to local refineries.
In a statement released on Friday, the refinery’s spokesperson, Anthony Chiejina, stated that NUPRC has only facilitated the sale of a single cargo between the refinery and crude oil producers.
Chiejina further noted that the regulatory body cited the “sanctity of a contract” as the reason for its inability to enforce its own Act.
“Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.
“All we are asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen.
“Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA citing “sanctity of contracts” as an excuse,” the statement read.
What you should know
- As Nigerians and marketers anticipate the rollout of Premium Motor Spirit (PMS) from the Dangote refinery and other refineries across the country, questions about meeting local crude oil demand persist.
- According to the Nigerian Upstream Petroleum Regulatory Commission (NURPC), eight refineries are expected to commence operations in August, with a combined refining capacity of 864,500 barrels per day (bpd).
- This would require oil producers to supply more than half of that amount.
- A total of 52 oil producers, including major players such as TotalEnergies, Chevron, Shell, and ExxonMobil, are expected to supply the necessary crude, primarily through their joint venture operations with the Nigerian National Petroleum Corporation (NNPC) Limited.
