Dangote Refinery Faces Another Delay in Petrol Rollout Amid Crude Supply Issues

The much-anticipated rollout of petrol from the Dangote Petroleum Refinery has faced another delay, with industry sources confirming that the refinery, originally scheduled to begin production today, may not meet the deadline due to ongoing crude oil supply challenges.

Aliko Dangote, President of Dangote Group, had earlier announced that the refinery would start producing petrol between August 10 and 12, 2024. However, insiders now suggest that petrol production may only begin later this month. According to reliable sources, while the refinery is technically prepared, consistent crude oil supply remains a significant hurdle.

“The refinery is ready to produce and distribute petrol this month, but the operation hinges on a continuous and adequate supply of crude oil, which has been inconsistent,” a top official disclosed on Sunday under the condition of anonymity.

Further investigations revealed that the refinery is currently waiting for the delivery of 29 million barrels of crude oil, allocated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). However, there is a discrepancy over whether these barrels have been delivered. The NUPRC claims to have facilitated the supply of over 29 million barrels to the refinery from January to June 2024, a claim the Dangote Group has denied.

In a statement, the Dangote Group thanked NUPRC for the allocation but clarified that they had not received the crude. The company expressed frustration over the continued involvement of international middlemen in local crude sales, which complicates direct purchases from Nigerian producers as mandated by the Petroleum Industry Act.

This ongoing supply issue has cast doubt on whether the refinery can meet its promise to start selling petrol locally this month. Experts have highlighted the difficulty Dangote faces in competing with international market prices, which may compel the refinery to prioritize exports over local sales to avoid losses.

Meanwhile, petroleum marketers across Nigeria are eagerly awaiting the refinery’s petrol supply. Both major and independent marketers have expressed interest, hoping to reduce their reliance on the Nigerian National Petroleum Company Limited (NNPCL) for petrol.

Industry experts and marketers have called on the NNPC and International Oil Companies (IOCs) to expedite the crude supply to local refineries, emphasizing the potential positive impact on Nigeria’s economy and the naira if crude is supplied in local currency and in the necessary volumes.