Dare Babalola
The management of Dangote Petroleum Refinery on Wednesday raised fresh concerns over disruptions in its crude supply chain, revealing that inconsistent deliveries under a government-backed arrangement are pushing the company toward more expensive sourcing options.
Speaking during an interview on ARISE News, the refinery’s Chief Executive Officer, David Bird, disclosed that the facility is receiving significantly fewer crude shipments than anticipated under the crude-for-naira framework.
Instead of the projected 13 to 15 cargoes per month, only about five are currently being delivered.
“What we see under that agreement is that we should be getting about 13 to 15 cargoes monthly to meet Nigeria’s domestic fuel needs. Currently, we are only getting five, which is clearly below the agreed volume,” Bird said.
The shortfall, he explained, has compelled the refinery to turn to international markets to secure specific Nigerian crude grades, often at a premium. According to Bird, this situation is inadvertently increasing costs and leading to financial outflows that could otherwise be retained within the local economy.
“And that difference between what we should be paying and the premium we now pay is value that is effectively leaving the country for international traders,” he added.
He clarified that the crude-for-naira initiative was primarily designed to ease pressure on Nigeria’s foreign exchange system rather than to provide discounted inputs for the refinery.
“Crude-for-naira is not set up to benefit Dangote Refinery directly. Its main objective is to support foreign exchange stability and ensure domestic crude is processed in local currency for the benefit of the economy,” Bird explained.
Despite these challenges, the refinery continues to operate at its full installed capacity of 650,000 barrels per day, supplying both local and regional markets. However, Bird noted that global oil market tensions, particularly in the Middle East, have driven up operational costs across shipping, insurance, and logistics.
He emphasised that fuel pricing remains influenced by international market forces, as the refinery does not receive subsidies or discounted crude inputs.
To address the situation, Bird called for more reliable crude allocation and a broader national strategy to strengthen supply stability.
“There is a need for better long-term planning around crude supply, including building strategic reserves that can help cushion shocks and ensure consistent operations,” he said.
Crude Supply Gaps Force Dangote Refinery Into Costlier Imports — CEO Warns
Crude supply gaps force Dangote Refinery into costlier import, CEO warns
Dare Babalola
The management of Dangote Petroleum Refinery on Wednesday raised fresh concerns over disruptions in its crude supply chain, revealing that inconsistent deliveries under a government-backed arrangement are pushing the company toward more expensive sourcing options.
Speaking during an interview on ARISE News, the refinery’s Chief Executive Officer, David Bird, disclosed that the facility is receiving significantly fewer crude shipments than anticipated under the crude-for-naira framework.
Instead of the projected 13 to 15 cargoes per month, only about five are currently being delivered.
“What we see under that agreement is that we should be getting about 13 to 15 cargoes monthly to meet Nigeria’s domestic fuel needs. Currently, we are only getting five, which is clearly below the agreed volume,” Bird said.
The shortfall, he explained, has compelled the refinery to turn to international markets to secure specific Nigerian crude grades, often at a premium. According to Bird, this situation is inadvertently increasing costs and leading to financial outflows that could otherwise be retained within the local economy.
“And that difference between what we should be paying and the premium we now pay is value that is effectively leaving the country for international traders,” he added.
He clarified that the crude-for-naira initiative was primarily designed to ease pressure on Nigeria’s foreign exchange system rather than to provide discounted inputs for the refinery.
“Crude-for-naira is not set up to benefit Dangote Refinery directly. Its main objective is to support foreign exchange stability and ensure domestic crude is processed in local currency for the benefit of the economy,” Bird explained.
Despite these challenges, the refinery continues to operate at its full installed capacity of 650,000 barrels per day, supplying both local and regional markets. However, Bird noted that global oil market tensions, particularly in the Middle East, have driven up operational costs across shipping, insurance, and logistics.
He emphasised that fuel pricing remains influenced by international market forces, as the refinery does not receive subsidies or discounted crude inputs.
To address the situation, Bird called for more reliable crude allocation and a broader national strategy to strengthen supply stability.
“There is a need for better long-term planning around crude supply, including building strategic reserves that can help cushion shocks and ensure consistent operations,” he said.
