Dangote Petroleum Refinery and Petrochemicals has said its decision on crude purchases under Nigeria’s Domestic Crude Supply Obligation framework is determined by the actual availability and commercial viability of the crude offered.
The clarification followed reports citing data from the Nigerian Upstream Petroleum Regulatory Commission which suggested that the refinery rejected 15.5 million barrels of crude offered by local producers during the second quarter of 2026.
The refinery said the figures should be considered in the context of the actual volumes available for purchase and the prices at which the crude was offered.
The company reiterated its commitment to buying Nigerian crude and supporting the objectives of the DCSO, but stressed that domestic crude must be supplied in sufficient quantities and at prices that are competitive with prevailing market benchmarks.
Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the critical issue was not simply the volume listed as having been offered to the refinery, but the quantity that could actually be purchased on commercially sustainable terms.
Edwin said the refinery had consistently raised concerns about inadequate access to domestic crude and had recently encountered offers priced significantly above 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 said.
He said the refinery, like other operators, had to procure crude at prices that would allow it to maintain sustainable operations and create value.
“This is essential to maintaining the economics of domestic refining and enabling us to deliver petroleum products to Nigerians at affordable and competitive prices,” he added.
According to Edwin, the refinery has encountered significant challenges in obtaining crude directly from domestic producers since the implementation of the DCSO framework.
He said a substantial proportion of crude allocated under the arrangement had consequently been sourced through International Oil Companies and other third parties instead of directly from Nigerian upstream producers.
Edwin explained that sourcing crude through additional parties could introduce premiums and transaction costs, potentially pushing the final purchase price above internationally recognised benchmarks published by agencies such as Platts and Argus.
He said the additional costs had, in some instances, made Nigerian crude less competitive than alternative supplies available in the international market.
“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining,” Edwin said.
“Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market.”
Dangote Refinery maintained that its position was not a rejection of Nigerian crude but a call for a domestic supply system that guarantees adequate volumes at commercially competitive prices.
The company said access to competitively priced domestic crude remained critical to the sustainability of local refining and its ability to supply petroleum products to the Nigerian market at affordable prices.
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