Dangote Refinery Accuses NNPCL Of Under-Supplying Crude Oil Amid Naira-For-Crude Scheme
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The Dangote Refinery has raised alarm over insufficient crude oil supplies from the Nigerian National Petroleum Company Limited (NNPC Ltd), alleging that the state oil firm is failing to meet its supply obligations.
Edwin Devakumar, Vice-President of Dangote Industries Limited (DIL), disclosed in an interview with Reuters that the refinery had requested 650,000 barrels per day (bpd), but the NNPC Ltd. had committed to a minimum of 385,000 bpd, a figure that it has not even come close to delivering.
Devakumar expressed frustration, stating, “We need 650,000 barrels per day, (NNPC Ltd) agreed to give a minimum of 385,000 bpd but they are not even delivering that.”
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The inadequate supply is compounded by the ongoing challenges surrounding the Naira-for-Crude scheme, introduced by the Federal Government as a method to sell crude oil and refined petroleum products in naira instead of foreign currencies.
Mathins Obaze, Acting Executive Director of the Crude Oil Refinery-owners Association of Nigeria (CORAN), echoed similar concerns, noting that while the Dangote Refinery is the only facility benefiting from the naira-denominated crude sales initiative, other members of the association are still unable to access crude oil in naira.
He confirmed that refineries are actively engaging with the government to find a resolution to the issue.
The Naira-for-Crude scheme, launched in October 2024, was intended to reduce Nigeria’s reliance on foreign currency for crude oil transactions, but the sluggish delivery of supplies has raised doubts about its effectiveness.
While efforts to reach Olufemi Soneye, Chief Corporate Communications Officer of NNPC Ltd, for comment proved unsuccessful, NNPC’s Group Chief Executive Officer, Mele Kyari, recently defended the scheme.
Speaking at the 42nd Nigeria Association of Petroleum Explorationists (NAPE) Annual International Conference in Lagos, Kyari described the Naira-for-Crude initiative as “a great initiative,” stressing that reports claiming NNPC Ltd. is unwilling to sell crude to refineries in naira are false.
The continued under-supply of crude oil to Dangote Refinery could hamper the operations of one of Nigeria’s largest and most advanced refineries, raising further concerns about the viability of the naira-based oil trade initiative.
