The management of Dangote Industries Limited (DIL) has insisted that international oil companies (IOCs) are frustrating its request to purchase crude feedstock for the Dangote refinery.
In a statement on Wednesday, Devakumar Edwin, vice-president of oil and gas at Dangote Industries Limited (DIL), said the implementation of the domestic crude supply obligation (DCSO) guidelines would allow the refinery to deal directly with companies producing crude oil in Nigeria.
On June 4, Aliko Dangote, Africa’s richest person, said some international oil IOCs were struggling to supply crude to his refinery.
Edwin said IOCs operating in Nigeria have consistently rebuffed the company’s requests for locally produced crude as feedstock for its refining process.
He said when cargoes are offered to the refinery by the trading arms, it is sometimes at a $2 to $4 per barrel premium above the official price set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“As an example, we paid $96.23 per barrel for a cargo of Bonga crude grade in April (excluding transport). The price consisted of $90.15 dated brent price + $5.08 NNPC premium (NSP) + $1 trader premium,” he said.
“In the same month, we were able to buy WTI at a dated brent price of $90.15 + $0.93 trader premium including transport. When NNPC subsequently lowered its premium based on market feedback that it was too high, some traders then started asking us for a premium of up to $4m over and above the NSP for a cargo of Bonny Light.
“Data on platforms like Platts and Argus shows that the price offered to us is way higher than the market prices tracked by these platforms. We recently had to escalate this to NUPRC.”
