The management of Dangote Refinery has reaffirmed its stance that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is not upholding the Petroleum Industry Act (PIA) regarding the domestic supply of crude oil to local refineries.
In a statement by the spokesperson of the refinery, Anthony Chiejina, on Friday, the oil company said NUPRC has only facilitated the sale of one cargo between itself and crude oil producers.
Accordingly, Chiejina said the regulatory body said it cannot implement its own Act because of the “security of a contract,”.
Dangote said all the company is demanding is the supply of crude to local refineries as stipulated in the PIA.
“We are in receipt of NUPRC’s statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals, we would like to thank them for this allocation but at the same time, we wish to let them know that we are yet to receive these cargoes.
“Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.
“All we are asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen.
“Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA citing “sanctity of contracts” as an excuse,” the statement said.
Backstory
Nairametrics had earlier reported that the Dangote refinery said that they are still unable to secure their full crude requirement from domestic production and urged the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) to enforce the domestic supply obligation as mandated by the Petroleum Industry Act (PIA).
The Dangote Group further alleged that it used to buy Nigeria crude oil from international traders at an additional premium of $3 to $4 per barrel.
The Group stated this in a press statement signed by its Chief Branding and Communications Officer, Anthony Chiejina where it clarified media reports that NNPC had supplied its quota of crude oil to the Dangote oil refinery.
According to the statement, the company noted that IOCs are not complying with oil supply guidelines from the NUPRC.
It explained that It had to buy the same Nigerian crude oil from the IOCs international trading arm at a premium of up to $3 to $4.
What you should know
The Dangote Refinery has been embroiled in an ongoing dispute with Nigerian oil sector authorities regarding the supply of crude oil.
Recently, the Federal Executive Council (FEC) approved a significant policy shift, allowing crude oil to be sold to the refinery in Naira instead of U.S. dollars.
In line with the Petroleum Industry Act (PIA), the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) requires oil producers in the country to supply a specified quantity of crude oil to local refineries under the Domestic Crude Supply Obligation (DCSO).
This directive ensures that local refineries, including the Dangote Refinery, have access to the crude oil needed for their operations.