Why Dangote Refinery can’t get enough crude supply from IOCs in Nigeria – LCCI

The Director-General of Lagos State Chamber of Commerce and Industry (LCCI), Dr Chinyere Almona has blamed insufficient supply of crude to Dangote Refinery and other local refineries in the country on oil theft and vandalization of pipelines

Dr Almona’s position is contained in a statement which appears to have contradicted the view by the Chairman of Dangote Refinery, Aliko Dangote to the effect that the IOCs preferred exporting the crude oil to earn foreign exchange to selling it to local refineries.

Recall that in a recent interview with CNN, the Chairman of Dangote Refinery, Aliko Dangote revealed that IOCs are struggling to supply local refineries crude.

According to him, the IOCs preferred exporting the product to earn foreign exchange.

“The NNPC is doing its best, but some of the IOCs, are struggling to give us crude. Everybody is used to exporting, and nobody wants to stop,” Dangote told CNN recently.

Reacting to the development, Almona said the issue of oil theft, and pipeline vandalism were actually contributory factors hindering crude supply to local refineries.

“The issue of oil theft, pipeline vandalism, and policy concerns, among others, are all contributory factors.

“The issue of IOCs supplying crude oil to Dangote Refinery is a subject of our ongoing conversations around what information is in the public, and our preliminary engagements with some parties.

“Based on public information from Dangote Group, it has been confirmed that some IOCs have been supplying crude to the Dangote refinery.

“The efforts of the government in ensuring crude supply to Nigerian refineries, including Dangote Refinery, are reasonable.

“However, we call on the Nigerian Petroleum Corporation Company Limited, NNPCL and Nigerian Upstream Petroleum Regulatory Commission, NUPRC to do more in granting a soft landing to the new refinery if there are any issues around pricing and supply contracts between the two parties,” the Director General said.

Recall that despite Nigeria producing 1,281,478 barrels of crude oil daily (excluding condensates) Dangote Refinery had looked to the US for crude supply.

Experts familiar with the industry had blamed a lack of crude supply for the slow commencement of fuel production in Dangote refinery.

In January 2024, Dangote Refinery commenced production of diesel and aviation fuel months after its commissioning in May last year.