Fuel shortage imminent as Dangote criticizes NNPCL for providing insufficient petrol supply
The Dangote Petroleum Refinery has stated that the Federal Government is failing to meet its crude oil supply commitments under the naira-for-crude initiative.
Devakumar Edwin, Vice President of Dangote Industries Limited, revealed that the refinery has received only a small portion of the agreed crude oil volumes from the Nigerian National Petroleum Company Limited (NNPCL). This shortfall, he said in a report by Reuters, is inadequate to increase refined product output.
According to Edwin, the NNPCL had promised to supply at least 385,000 barrels per day (bpd) since the program began in October, but actual deliveries have fallen far short of this target.
“We need 650,000 bpd. NNPCL agreed to give a minimum of 385,000 bpd, but they are not even delivering that,” he stated.
The naira-for-crude initiative, launched in July to alleviate foreign exchange pressures, allows local refineries to purchase crude oil using naira.
Despite this arrangement, industry sources told The PUNCH that while four shipments of crude oil have been delivered to the Dangote refinery, additional supplies are still awaited.
Less than two months into the program, the refinery is reportedly exploring alternative crude sources, including imports from the United States. On Wednesday, it acquired two million barrels of US WTI Midland crude—the first such purchase since August—highlighting its reliance on international markets amid domestic supply constraints.
The $20 billion Lekki-based refinery, which aims to compete with European counterparts, is currently operating below its full capacity of 425,000 barrels per day (bpd) and is targeting 85% capacity by the end of the year.
Dangote Group Executive Edwin described the crude deliveries from the Nigerian National Petroleum Company Limited (NNPCL) as “peanuts,” emphasizing the significant shortfall between the refinery’s requirements and the supplied volume.
Mathins Obaze, acting Executive Director of the Crude Oil Refinery-Owners Association of Nigeria, confirmed that Dangote is the only refinery benefiting from the naira-for-crude arrangement out of the eight operational refineries in the country. However, he noted that most members have not been able to access crude under the initiative and are in discussions with the government for a resolution.
The reasons behind the crude supply deficit remain unclear, as both NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) have declined to comment. Dangote had earlier called on the NUPRC to enforce rules requiring oil producers to prioritize local refineries.
Meanwhile, NNPCL is actively seeking new international markets for its crude oil. Recently, the company marketed its new Utapate crude oil grade to term customers in London, signaling a focus on global opportunities despite ongoing domestic supply challenges.
