The international oil companies operating in Nigeria are seeking to undermine the operations and profit margins of Africa’s largest refinery, Dangote, by asking for high premiums for domestically produced crude, a senior official at the Dangote refinery has told local media.
The Dangote Refinery in Nigeria, Africa’s biggest, began the production of fuels in January 2024, marking the start-up of the refinery that has seen years of delays.
Now a senior official accuses the multinational companies operating in the country of “plotting” to bankrupt the refinery.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude,” Devakumar Edwin, Vice President, Oil and Gas at Dangote Industries Limited (DIL), told Nigerian media this weekend.
“It seems that the IOCs’ objective is to ensure that our Petroleum Refinery fails. It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude is not available,” Nigeria’s newspapers quoted Edwin as saying.
The refinery had to pay $6 per barrel above the market price at one point, the official added.
“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports crude oil and imports refined petroleum products,” Edwin was also quoted as saying.
The Dangote refinery, which has a processing capacity of 650,000 barrels per day (bpd), is expected to meet 100% of Nigeria’s demand for all refined petroleum products and have a surplus of each of the products for export.
The refinery expects to export diesel to customers in Europe, as well as gasoline to Latin American and African markets. However, production of Euro V gasoline, the gasoline complying with Europe’s emissions standards, is not expected to be produced until late 2024, according to analysts at Facts Global Energy.
Aliko Dangote, Africa’s richest man, is looking to set up a trading firm that would handle crude supply for the new mega refinery in Nigeria, Reuters reported in March, citing multiple sources with knowledge of the plans.
Source: Oilprice.com