Dangote Petroleum Refinery and Petrochemicals has said International Oil Companies operating in Nigeria still sell crude meant for domestic refining through third parties, resulting in additional costs that make Nigerian crude less competitive.
The refinery said this while clarifying reports based on data released by the Nigerian Upstream Petroleum Regulatory Commission, which suggested that it rejected 15.5 million barrels of crude offered by local producers in the second quarter of 2026.
In a late statement on Tuesday, the Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the refinery remained committed to sourcing Nigerian crude and supporting the Domestic Crude Supply Obligation framework, but noted that adequate volumes must be available at commercially viable prices.
He said the refinery had faced significant challenges in securing crude directly from domestic producers since the commencement of the DCSO framework.
“As a result, a substantial portion of the crude allocated under the arrangement has had to be sourced through International Oil Companies and third parties rather than directly from Nigerian upstream producers,” Edwin said.
According to him, the use of IOCs and third parties often resulted in additional premiums and transaction costs, making Nigerian crude more expensive than alternative supplies available on the international market.
“This process often introduces additional premiums and transaction costs that can drive crude prices above internationally recognised benchmarks published by agencies such as Platts and Argus. In many cases, this has made domestically sourced crude less competitive than alternative supplies available on the international market,” he said.
Edwin said the refinery’s concern was not the volume of crude nominally offered under the DCSO arrangement, but the quantity genuinely available for purchase under commercially viable conditions.
“Our position is straightforward. We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices. Like every refinery, we must procure crude that supports sustainable operations and value creation.
“This is essential to maintaining the economics of domestic refining and enabling us to deliver petroleum products to Nigerians at affordable and competitive prices,” he said.
He added that the additional costs arising from intermediaries ultimately affected the price of refined petroleum products in the domestic market.
“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining.
“Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market,” Edwin added.
The clarification comes as fresh NUPRC data showed that domestic crude supplies to local refineries rose sharply in the second quarter, with 53.7 million barrels supplied during the period.
Recall that the refinery had repeatedly accused the IOCs and some government agencies of sabotaging the refinery through crude denial.
