Dangote Disputes NUPRC’s Rejected Domestic Crude Supply Figures

…Says we want Nigerian crude, but only at competitive prices

Dangote Petroleum Refinery and Petrochemicals has challenged data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that suggested the refinery rejected 15.5 million barrels of domestically offered crude in Q2 2026, saying it remains willing to buy Nigerian crude “provided it is available in sufficient volumes and at competitive market prices.”

The company, in a statement, described the issue as commercial, saying it remains willing to buy Nigerian crude but only when supplies are available in adequate volumes and offered at commercially competitive prices.

Group VP for Oil & Gas and Fertiliser Devakumar Edwin said nominal allocations under the Domestic Crude Supply Obligation (DCSO) do not always translate into crude that is practically available for purchase on market terms. He told reporters the refinery has encountered cases where allocated crude was not deliverable or was offered at premiums that pushed prices above international benchmarks such as Platts and Argus, prompting the plant to source some volumes through international oil companies and third parties.

The company did not provide detailed data on the frequency of such occurrences, the size of the premiums cited, or how those additional costs were calculated. That makes it difficult to assess whether supply shortfalls stem from producers’ delivery challenges, intermediary markups, or the refinery’s procurement terms.

Questions also remain about how “commercially competitive” prices are benchmarked in domestic negotiations. International price markers may not reflect local logistics, levies or contractual constraints faced by producers, and Dangote has not published the offer prices or the landed-cost comparisons it used to justify declining some domestic supplies.

On the regulatory side, the Nigerian Upstream Petroleum Regulatory Commission, which published figures indicating the refinery turned down significant volumes, has not yet released a reconciliation of allocated versus delivered volumes or an independent audit of price disputes under the DCSO. Without such information from the regulator, stakeholders lack an independent account of whether allocations were unmet, intermediaries raised costs, or commercial terms prevented purchases.

The economic case for sourcing domestic crude also depends on broader factors. If domestic barrels are consistently pricier, analysis should consider offsets such as reduced import bills or fiscal incentives that could improve the net economics of domestic refining. If intermediaries are a major driver of higher costs, regulators could consider measures to streamline transfers or restrict third-party brokering.

The DCSO’s objective is to secure feedstock for domestic refining to help cut fuel imports and lower retail fuel prices. To evaluate whether the framework is meeting that goal, more transparency is needed: publication of allocation, offers, deliveries and price data, and an independent reconciliation by the NUPRC or a parliamentary committee would allow policymakers and the public to determine where the bottlenecks lie.