The Dangote Refinery, has revealed that 60% of its crude feedstock since commencing full operations has been supplied by the Nigerian National Petroleum Company (NNPC) Limited.
This disclosure came during a presentation by Aliyu Suleiman, the Group Chief Strategy Officer of the Dangote Refinery, to an ad hoc Senate committee on August 7.
The Senate committee, led by Senate Majority Leader Opeyemi Bamidele, is currently investigating allegations surrounding the importation of substandard petroleum products into Nigeria.
According to Suleiman, the refinery has processed approximately 50 million barrels of crude oil since its operations began.
Out of this, 60% of the total processed crude was supplied by NNPC, while 20% was imported, and the remaining 20% was purchased locally.
“About 60 percent of that came from the NNPC, and we are thankful and grateful to them for their support,” Suleiman said.
He further emphasized the refinery’s willingness to pay fair market prices for crude, highlighting that their relationship with the NNPC has been crucial in maintaining operations.
However, Suleiman expressed concerns over the crude they purchase from sources outside the NNPC, urging regulatory bodies to ensure that domestic producers supply crude directly to the refinery, rather than through international intermediaries.
“We hope that we will work with the regulator and we will get their support so that the refinery can get 100 percent of its crude from Nigeria and buy the crude from companies that produce it in Nigeria — not from international middlemen,” Suleiman stated.
He noted that while the refinery is content with the current pricing structure provided by NNPC, the introduction of clear regulatory guidelines could further streamline operations and potentially reduce costs.
Beyond the technicalities of crude supply, Suleiman outlined the broader benefits of the Dangote Refinery to Nigeria.
He pointed out that the refinery’s operations would significantly bolster the nation’s foreign exchange (FX) reserves, create jobs, and most importantly, boost the psychological confidence of Nigerians and Africans in general, showing that the continent can manage and operate large-scale industrial projects successfully.
The refinery, which has a capacity of 650,000 barrels per day, is a key project spearheaded by Aliko Dangote, Africa’s richest man.
On June 4, Dangote acknowledged the vital role NNPC has played in supplying crude to the refinery but also noted the challenges faced in securing supplies from International Oil Companies (IOCs).
This issue was further complicated when, on July 15, Gbenga Komolafe, the CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), disputed Dangote’s claims, describing them as “erroneous.”
He referenced the Petroleum Industry Act (PIA), which establishes a framework for willing buyer-willing seller transactions, indicating that the supply issues might be more complex than initially presented.
However, the management of Dangote Industries Limited (DIL) maintained that certain IOCs were indeed hindering their efforts to secure adequate crude feedstock, reaffirming the challenges mentioned by Dangote..
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