The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), as mandated by the Petroleum Industry Act (PIA), has received a request from the Dangote Petroleum Refinery’s management to enforce the domestic crude supply obligation.
It argued that, as stipulated in the PIA legislation, refineries in Nigeria ought to be permitted to purchase petroleum directly from Nigerian producers rather than through foreign middlemen.
“We are in receipt of NUPRC’s statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals,” said Anthony Chiejina, a spokesman for the Dangote Group, yesterday night.
He continued saying, “We would like to thank them for this allocation, but at the same time, we wish to let them know that we are yet to receive these cargoes.
“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.”
Chiejina added: “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. This is specified in the PIA.
“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.”
Recall that the management of the Dangote Petroleum Refinery had previously stated that it was not receiving enough crude from the Nigerian National Petroleum Corporation Limited (NNPCL) to effectively optimise its refinery.
“We therefore still insist that we are unable to secure our full crude requirement from domestic production and urge the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to fully enforce the domestic crude supply obligation as mandated by the PIA,” the refinery’s management stated in a release signed by Group Chief, Branding and Communications Officer, Anthony Chiejina.
Chiejina made it clear that his business has never claimed that NNPC isn’t providing it with crude oil. “We have always been concerned about NUPRC’s unwillingness to uphold the domestic crude supply obligation and make sure that we obtain all of the crude we require from NNPC and the IOCs.”
He further explained that “for September, our requirement is 15 cargoes, of which NNPC allocated six. Despite appealing to NUPRC, we’ve been unable to secure the remaining cargoes.
“When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed.
“Consequently, we often purchase the same Nigerian crude from international traders at an additional $3-$4 premium per barrel which translates to $3-$4 million per cargo.”
