Dangote Petroleum Refinery and Petrochemicals has said its commitment to buying Nigerian crude remains unchanged, but insisted that domestic supplies must be available in sufficient quantities and offered at commercially competitive prices to sustain local refining.
The company made the clarification following reports citing data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which indicated that the refinery rejected 15.5 million barrels of crude offered by local producers in the second quarter of 2026.
Dangote Refinery said the central issue was not how much crude was nominally offered under the Domestic Crude Supply Obligation (DCSO), but how much was actually available for purchase on commercially viable terms.
Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the refinery remained ready to purchase Nigerian crude and support the objectives of the DCSO framework.
“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.”
The company said it had consistently raised concerns about inadequate domestic crude availability and had more recently encountered situations where crude was offered at prices significantly above prevailing international market benchmarks.
According to Edwin, since the DCSO framework commenced, the refinery has faced difficulties obtaining sufficient crude directly from Nigerian upstream producers.
Consequently, he said, a substantial proportion of crude allocated under the domestic supply arrangement had to be procured through International Oil Companies (IOCs) and third parties rather than directly from producers.
Dangote said the involvement of intermediaries frequently introduced additional premiums and transaction costs, pushing the acquisition price of some domestic crude above internationally recognised benchmarks published by price-reporting agencies such as Platts and Argus.
The refinery argued that such additional costs could ultimately undermine one of the principal objectives of domestic refining — supplying petroleum products to Nigerian consumers at competitive prices.
“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,” Edwin said.
He stressed that the refinery’s concerns were not directed at the objectives of the DCSO policy, which the company said it strongly supports, but at some of the practical challenges surrounding its implementation.
Edwin also raised concerns about aspects of the Petroleum Industry Act framework that allow counterparties to withdraw from negotiations without what he described as a structured review process or adequate safeguards.
According to the company, such circumstances create uncertainty and could weaken the effectiveness of the domestic crude supply framework.
Dangote Refinery said that, excluding cargoes supplied under Nigerian National Petroleum Company Limited term contracts, it had successfully concluded negotiations for only a limited number of DCSO cargoes since the arrangement began.
It added that in some instances, crude cargoes supposedly earmarked for domestic refining had already been committed to other buyers before negotiations with the refinery commenced.
The company said those experiences highlighted the need for greater transparency, improved market efficiency and commercially sustainable arrangements between crude producers and domestic refiners.
It maintained that reliable access to competitively priced crude was critical to ensuring that Nigeria maximised its growing domestic refining capacity.
Dangote Refinery said an effective domestic crude supply system would also strengthen Nigeria’s energy security, reduce dependence on imported petroleum products, conserve foreign exchange and retain more value within the Nigerian economy.
The refinery reiterated that it remained willing to purchase Nigerian crude, maintaining that availability and commercial viability, rather than merely the volume officially offered under the DCSO framework, should be central to assessing domestic crude supply.
