The Dangote Petroleum Refinery and Petrochemicals has clarified that its position on domestic crude supply is not about rejecting Nigerian crude, but about ensuring that crude offered under the Domestic Crude Supply Obligation (DCSO) is available in sufficient volumes and at commercially competitive prices.
The clarification follows recent reports citing data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which indicated that the refinery rejected about 15.5 million barrels of crude offered by local producers in the second quarter of 2026.
The refinery said the headline figure does not fully capture the realities of Nigeria’s domestic crude supply market, stressing that the key issue is the quantity of crude genuinely available for purchase on commercially viable terms.
The Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the refinery remained committed to buying Nigerian crude and supporting the objectives of the DCSO framework.
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“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. Like every refinery, we must procure crude that supports sustainable operations and value creation,” Edwin said.
He said commercially viable crude supply was essential not only to the sustainability of the refinery but also to its ability to supply petroleum products to Nigerians at affordable and competitive prices.
According to Edwin, the refinery has consistently faced challenges securing adequate volumes of crude directly from domestic producers since the commencement of the DCSO framework.
As a result, he said, a significant portion of crude allocated under the arrangement has had to be sourced through international oil companies and other third parties rather than directly from Nigerian upstream producers.
He explained that the involvement of additional intermediaries could introduce premiums and transaction costs that push the effective cost of Nigerian crude above internationally recognised market benchmarks published by agencies such as Platts and Argus.
“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining. Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market,” he said.
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The refinery said its concern was not with the policy objective of the DCSO, which it strongly supports, but with the way the framework operates in practice.
According to the company, the nominal allocation of crude under the DCSO should not be confused with crude that is actually available for purchase.
Edwin said the refinery had, in several instances, encountered situations where cargoes earmarked for domestic refining had already been committed to other buyers before negotiations with the refinery began.
He added that, excluding cargoes supplied under NNPC term contracts, the refinery had concluded negotiations for only a limited number of DCSO cargoes since the arrangement commenced.
The company also raised concerns about aspects of the Petroleum Industry Act framework that allow counterparties to withdraw from negotiations without a structured review process or adequate safeguards.
It said such situations create uncertainty and undermine the effectiveness of a framework intended to guarantee crude supply to domestic refineries.
The Dangote Refinery said reliable access to Nigerian crude is critical to maximising the country’s refining capacity and delivering the wider economic benefits of domestic refining.
A more predictable domestic crude supply system would, according to the company, strengthen Nigeria’s energy security, reduce dependence on imported petroleum products, conserve foreign exchange and ensure that more value is retained within the Nigerian economy.
The refinery stressed that it does not seek preferential treatment, but a transparent and commercially sustainable crude procurement framework.
The company said the objective should be to ensure that crude intended for domestic refineries is genuinely available, competitively priced and supplied through an efficient market mechanism.
The clarification comes as Nigeria seeks to maximise the benefits of its expanding domestic refining capacity and reduce its historical dependence on imported petroleum products.
For the Dangote Refinery, the issue is therefore not whether Nigerian crude should be bought, but whether the country’s domestic crude supply system can deliver sufficient volumes at prices that make local refining economically sustainable.
“We are ready and willing to purchase Nigerian crude oil,” Edwin reiterated, “provided it is available in sufficient volumes and at competitive market prices.”
