Dangote Petroleum Refinery and Petrochemicals says its rejection of some crude oil offered under the Domestic Crude Supply Obligation, DCSO framework was driven by concerns over availability and commercial viability, stressing that domestic crude must be supplied in sufficient volumes and at competitive market prices.
The clarification followed reports citing data from the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, which indicated that the refinery rejected 15.5 million barrels of crude oil offered by local producers in the second quarter of 2026.
The Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the refinery remained committed to sourcing Nigerian crude and supporting the objectives of the DCSO.
He, however, said the key issue was not the volume of crude nominally offered under the arrangement, but the quantity genuinely available for purchase on commercially viable terms.
“Our position is straightforward. We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices,” Edwin said.
According to him, the refinery has consistently faced challenges in securing adequate crude supplies directly from domestic producers, resulting in a substantial portion of its allocated crude being sourced through International Oil Companies, IOCs and third parties.
He said the involvement of intermediaries often introduced additional premiums and transaction costs, pushing the cost of domestic crude above internationally recognised market benchmarks published by agencies such as Platts and Argus.
Edwin noted that when domestically sourced crude becomes more expensive than alternative supplies available on the international market, it undermines the economics of domestic refining.
“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining. Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market,” he said.
He stressed that ensuring commercially viable crude supplies was essential to sustaining domestic refining operations and enabling the refinery to supply petroleum products to Nigerians at affordable and competitive prices.
The company therefore maintained that the DCSO framework would achieve its intended objectives more effectively where Nigerian crude is made available directly, in adequate volumes and at prices that reflect prevailing market conditions.