Dangote Refinery Fails to Meet NNPCL’s 1.065 Billion Litres Fuel Supply Request

The ongoing controversy between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) over petrol supply escalated further, with recent reports revealing that the refinery has fallen short of the agreed delivery volumes.

According to a document from NNPCL, the state oil company requested 1.065 billion litres of petrol from Dangote Refinery between September 15 and October 20, but the refinery managed to deliver only 317 million litres within the period. The document, titled “Summary of Volume Loading,” disclosed that Dangote Refinery supplied 103 million litres in September, representing just 26% of the requested amount, and 214 million litres in October, amounting to 32% of the target.

NNPCL remains the sole off-taker of fuel from Dangote Refinery, which began production on September 15. However, the situation has grown more complex since the Federal Government introduced a policy allowing crude oil sales in naira to local refineries. This policy, which came into effect earlier this month, has permitted other marketers to purchase fuel directly from Dangote’s 650,000-barrels-per-day refinery.

Pricing discrepancies have also emerged between the two entities. At the start of fuel rollout, NNPCL claimed it was buying petrol at N898 per litre from Dangote. However, Dangote Refinery disputed this figure, though it did not provide an alternative price. In an updated pricing template this month, NNPCL claimed to be purchasing fuel at N977 per litre, which was again challenged by Dangote.

No New Legal Case, Says Dangote Refinery

In a related development, Dangote Refinery has confirmed that it is not pursuing any new legal action against NNPCL. The refinery clarified this in a statement by Group Chief Branding and Communications Officer, Anthony Chiejina, noting that the current case, which dates back to June and was filed in court on September 6, 2024, would be withdrawn in January 2025.

Chiejina explained that the lawsuit is related to an older issue and that discussions between the parties have progressed, especially following the presidential directive on the naira-for-crude initiative. He emphasized that no legal orders had been issued and that the dispute is expected to be resolved without further court proceedings.

Dangote’s Legal Prayers and Ongoing Case

In the earlier case, Dangote Refinery had sought a Federal High Court order in Abuja to void import licenses issued for petroleum products, including those given to NNPCL and other companies like Matrix Petroleum Services. The refinery argued that these licenses violated the Petroleum Industry Act (PIA), particularly as Dangote’s production of Automotive Gas Oil (AGO) and Jet-A1 fuel exceeded Nigeria’s daily consumption needs.

Dangote’s claim sought N100 billion in damages from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), alleging that the issuance of import licenses for products it already supplies jeopardizes its investments and undermines local refinery efforts.

However, with talks between stakeholders making progress, the company plans to halt the legal proceedings, with a formal withdrawal expected in January 2025.