ABUJA, Nigeria (VOICE OF NAIJA)- The Dangote Petroleum Refinery has criticized the Federal Government for failing to meet its crude oil supply target under the naira-for-crude initiative.
According to the refinery, the crude supplied by the Nigerian National Petroleum Company Limited (NNPCL) is significantly below the volume needed to sustain optimal production of refined products.
In an interview with Reuters, the Vice President of Dangote Industries Limited, Devakumar Edwin, disclosed that since the program’s launch in October, the NNPCL has fallen short of the minimum supply target of 385,000 barrels per day (bpd).
“We need 650,000 barrels per day. NNPCL agreed to give a minimum of 385,000 bpd, but they are not even delivering that,” the Dangote official said.
In an effort to address foreign currency challenges, the government announced in July a plan to sell crude oil priced in naira to local refineries for an initial six-month period, starting in October.
Last month, The PUNCH exclusively reported the delivery of four cargoes of crude oil to the Dangote Petroleum Refinery.
However, sources familiar with the local crude sale arrangement revealed that the refinery is still awaiting additional supplies.
Less than two months into the initiative, the plan appears to be faltering, prompting the refinery to explore crude purchases from the United States.
The $20 billion Lekki-based refinery, designed to compete with European refineries when fully operational, continues to face challenges in securing adequate crude supplies to achieve optimal production levels.
READ ALSO: Naira-For-Crude: FG To Supply Dangote Refinery 400,000 Barrels Of Crude Daily
Although Devakumar Edwin refrained from providing exact figures, he characterized the crude deliveries from NNPC under the naira-for-crude scheme as “peanuts.”
Supporting this claim, the acting Executive Director of the Crude Oil Refinery-Owners Association of Nigeria, Mathins Obaze, confirmed that Dangote Refinery remains the sole beneficiary of the naira-denominated crude sale arrangement among Nigeria’s eight operational refineries.
“Members are still unable to access crude in naira and are currently engaging the government for a resolution,” Obaze said.
The cause of the shortfall remains unclear, as the NNPCL did not respond to a request for comment.
In August, Dangote Refinery called on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce regulations requiring oil producers to supply local refineries. However, the NUPRC did not provide a response to inquiries about the issue.
With a current refining capacity of 425,000 barrels per day and a target of 85% operational capacity by year-end, Dangote has turned to international markets to source crude.
The refinery recently purchased two million barrels of US WTI Midland crude, marking its first US crude purchase since August, according to trade sources and shipping data.
Meanwhile, NNPC is actively exploring new markets for its crude oil, with the company in London on Wednesday seeking term customers for its new Utapate crude oil grade.