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The management of Dangote Industries Limited has reiterated that the international oil companies are still obstructing crude supply to its 650,000-capacity refinery.
Despite commending the Nigerian Upstream Petroleum Regulatory Commission for its efforts in addressing the company’s crude supply requests from IOCs and for promoting transparency in the oil industry through the publication of the Domestic Crude Supply Obligation guidelines, the management highlighted that the IOCs are insisting on selling crude oil to its refinery through their foreign agents.
This has led to an increase in the local price of crude, as the trading arms offer cargoes at $2 to $4 per barrel above the NUPRC official price.
The group alleged that foreign oil producers appear to prioritize Asian countries in selling the crude they produce in Nigeria.
The Vice President of Oil & Gas at Dangote Industries Limited, Mr. DVG Edwin, emphasized the importance of diligently implementing the Domestic Crude Supply Obligation guidelines to ensure direct dealings with companies producing crude oil in Nigeria as mandated by the Petroleum Industry Act.
Edwin also pointed out that IOCs operating in Nigeria had consistently hindered the company’s requests for locally-produced crude as feedstock for its refining process.
He stated: “When cargoes were offered by the trading arms, it was sometimes at a premium of $2 to $4 per barrel above the official price set by the NUPRC.
“For instance, in April, Dangote Industries Limited paid $96.23 per barrel for a cargo of Bonga crude grade (excluding transport), which consisted of a $90.15 dated Brent price, a $5.08 NNPC premium, and a $1 trader premium.”
In contrast, they were able to buy WTI at a dated Brent price of $90.15 + $0.93 trader premium including transport in the same month.
