Enforce PIA Act On Crude Supply, Dangote Urges NUPRC

Management of Dangote Petroleum Refinery has urged the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce the domestic crude supply obligation as specified in the Petroleum Industry Act (PIA), insisting that refineries in Nigeria should be allowed to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen, as enshrined in the PIA act.

Spokesman of Dangote Group, Anthony Chiejina, said: “We are in receipt of NUPRC’s statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals, we would like to thank them for this allocation but at the same time we wish to let them know that we are yet to receive these cargoes.

“Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.”

“All we are asking for, is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen. This is specified in the PIA. Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA citing “sanctity of contracts” as an excuse.”

It would be recalled that Dangote Petroleum Refinery management had insisted that it was not yet getting enough crude required for the effective optimization of its refinery from the Nigerian National Petroleum Corporation Limited (NNPCL).

The refinery management, in a release signed by Chiejina, said, “We therefore still insist that we are unable to secure our full crude requirement from domestic production and urge the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), to fully enforce the domestic crude supply obligation as mandated by the PIA.”
Chiejina clarified that his company had never accused NNPC of not supplying “…us with crude. Our concern has always been NUPRC’s reluctance to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs.”

He added, “For September, our requirement is 15 cargoes, of which NNPC allocated six. Despite appealing to NUPRC, we’ve been unable to secure the remaining cargoes. When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed.
“Consequently, we often purchase the same Nigerian crude from international traders at an additional $3-$4 premium per barrel which translates to $3-$4 million per cargo”