Dangote Industries Limited (DIL) has expressed concerns over the rising prices of locally sourced crude oil due to the practices of international oil companies (IOCs). According to Devakumar Edwin, Vice President of Oil & Gas at DIL, these IOCs are offering crude oil at prices above the official rates set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). This situation has been a persistent challenge for DIL’s efforts to secure crude oil for its refinery operations.
Edwin commended NUPRC for its interventions and the publication of Domestic Crude Supply Obligation (DCSO) guidelines aimed at bringing transparency to the industry. He emphasized the importance of diligently implementing these guidelines to enable DIL to directly procure crude oil from Nigerian producers as stipulated by the Petroleum Industry Act (PIA).
However, despite these measures, IOCs allegedly continue to frustrate DIL’s efforts by offering crude oil cargoes at premiums ranging from $2 to $4 per barrel above the official NUPRC prices. For instance, in April, DIL reportedly paid $96.23 per barrel for Bonga crude, which included premiums like NNPC’s National Single Pricing (NSP) and additional trader premiums.
Edwin highlighted discrepancies between these prices and market rates tracked by platforms like Platts and Argus, urging NUPRC to reassess the pricing issue. He reiterated DIL’s stance that such practices by IOCs force them to consider importing crude from other countries, including the United States, which incurs higher costs.
This ongoing issue underscores DIL’s struggle to operate its refinery efficiently and competitively within Nigeria’s regulatory framework, amid challenges posed by pricing practices of IOCs in the country’s oil industry.