Dangote Refinery Disputes Crude Rejection Claim, Demands ‘Competitive’ Local Supply

Dangote Petroleum Refinery and Petrochemicals has challenged reports that it rejected 15.5 million barrels of crude oil offered by Nigerian producers in the second quarter of 2026, insisting that the key issues are the actual availability and commercial viability of the supplies.

The reports were based on data released by the Nigerian Upstream Petroleum Regulatory Commission, which indicated that the refinery had turned down crude offered under the Domestic Crude Supply Obligation framework.

In a statement on Tuesday, Dangote Refinery said it remained committed to purchasing Nigerian crude and supporting the objectives of the DCSO. It maintained, however, that crude must be available in sufficient quantities and offered at competitive prices to sustain local refining and enable the supply of affordable petroleum products.

Group Vice President, Oil and Gas and Fertiliser at Dangote Industries Limited, Devakumar Edwin, said the volume nominally offered under the DCSO did not necessarily reflect the quantity that was genuinely available for purchase on commercially acceptable terms.

“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.

“Like every refinery, we must procure crude that supports sustainable operations and value creation. This is essential to maintaining the economics of domestic refining and enabling us to deliver petroleum products to Nigerians at affordable and competitive prices.”

According to Edwin, the refinery has consistently raised concerns about inadequate domestic crude availability. He added that some recent offers were priced significantly above prevailing international market benchmarks.

He said the refinery had encountered considerable difficulty securing crude directly from Nigerian producers since the DCSO arrangement began. Consequently, a substantial share of its allocated crude had to be obtained through international oil companies and third parties.

Dangote said the involvement of intermediaries often introduced premiums and additional transaction costs, pushing prices above benchmarks published by commodity-pricing agencies such as Platts and Argus. In some cases, it said, Nigerian crude became less competitive than supplies obtainable from 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.”

The company stressed that it supported the intent of the DCSO policy but had concerns about operational challenges affecting its implementation.

It also raised questions about aspects of the Petroleum Industry Act framework that, according to the company, allow counterparties to withdraw from negotiations without a structured review process or sufficient safeguards. Dangote argued that such provisions create uncertainty and could weaken the domestic crude supply system.

Excluding cargoes delivered under Nigerian National Petroleum Company Limited term contracts, the refinery said it had concluded negotiations for only a limited number of DCSO cargoes since the framework was introduced.

It alleged that, in several cases, cargoes designated for domestic refining had already been committed to other buyers before negotiations with the refinery began.

Dangote called for greater transparency, more efficient market processes and commercially sustainable supply arrangements to support Nigeria’s refining ambitions.

The company said dependable access to competitively priced crude was crucial to maximising domestic refining capacity, strengthening energy security and reducing Nigeria’s dependence on imported petroleum products.

It added that a functional domestic crude supply system would help conserve foreign exchange, support affordable fuel production and retain more value within the Nigerian economy.