Dangote Refinery debunks NUPRC ‘Rejection’ data; demands ‘Genuinely Available’, Price-Competitive domestic crude - ITREALMS

Dangote Petroleum Refinery and Petrochemicals has vehemently clarified its position regarding the sourcing of local feedstock, following controversial data recently circulated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), reports ITREALMS.

Reports referencing the NUPRC data suggested that Africa's largest single-train refinery had rejected approximately 15.5 million barrels of crude oil offered by domestic producers during the second quarter of 2026.

In a swift rebuttal aimed at setting the record straight for stakeholders and the public, the company emphasised its unflinching commitment to sourcing Nigerian crude and supporting the statutory Domestic Crude Supply Obligation (DCSO) framework.

However, the refinery stressed a critical caveat: for domestic refining to remain sustainable and for Nigerians to enjoy affordable petroleum products, crude oil must not only be available in adequate volumes but must also be offered on genuinely commercially competitive terms.

Providing high-level context to the pricing and logistics dispute, Devakumar Edwin, Group Vice President, Oil & Gas and Fertiliser at Dangote Industries Limited, stated that the central issue is not the volume of crude nominally offered under the DCSO mechanism.

Instead, the bottleneck lies in the quantity that is genuinely available for purchase under commercially viable conditions.

Dr. Edwin revealed that the refinery has consistently raised alarms regarding the inadequate physical availability of domestic crude. More alarmingly, he noted that the facility has recently encountered situations where local crude is offered at prices significantly above prevailing international market benchmarks.

“Our position is straightforward: We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices,” Edwin asserted. “Like every refinery globally, we must procure crude that supports sustainable operations and value creation.”

He emphasised that this commercial realism is essential to maintaining the economics of domestic refining. Without it, the refinery cannot achieve its ultimate goal: delivering petroleum products to Nigerians at affordable and competitive prices.
Intermediary Premiums Bloating Local Costs

Dr. Edwin further explained that since the commencement of the DCSO framework, a provision meant to guarantee local supply under Nigeria's Petroleum Industry Act (PIA); the refinery has faced significant hurdles in securing direct supplies from upstream producers.

This regulatory bottleneck has forced the 650,000 barrels-per-day refinery to source a substantial portion of its needed allocated Nigerian crude through International Oil Companies (IOCs) and third-party traders, rather than directly from the producers’ wellheads.

According to the Group Vice President, this reliance on intermediaries frequently introduces additional premiums and transaction costs. These added layers, he argued, often drive the final acquisition price above internationally recognised benchmarks published by leading global agencies such as Platts and Argus.

This inefficiency, ITREALMS gathered, makes domestically sourced crude less competitive than alternative supplies available on the international market, contrary to the spirit of the local supply obligation.

“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining,” Edwin concluded. “Ultimately, higher crude costs translate directly into higher costs of refined petroleum products for the local market.”