The Federal Government’s plan to sell crude priced in naira is faltering, with the Dangote Oil Refinery, saying it is still unable to secure adequate supply from the Nigerian National Petroleum Company Limited(NNPCL).
To address challenges in accessing foreign currency, the government in July said it would sell crude priced in naira to local refineries for an initial six months starting in October.
“We need 650,000 barrels per day, NNPCL agreed to give a minimum of 385,000 bpd but they are not even delivering that,” said Edwin Devakumar, head of the Dangote refinery.
Still, Dangote is the only one of 8 operational refineries in Nigeria to have benefited from the naira-denominated crude sale arrangement, said Mathins Obaze, an acting executive director of the Crude Oil Refinery-owners Association of Nigeria (CORAN), a trade group of refiners.
Members are still unable to access crude in naira and are currently engaging the government for a resolution,” Obaze said.
The reason for the shortfall was not immediately clear. NNPC did not respond to a request for comment.
The Dangote refinery in August urged the oil regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce a rule that compels oil producers to supply local refineries.
NUPRC did not respond to a request for comment on the matter.
Dangote, with a current capacity of 425,000 bpd and a year-end target of 85% operational capacity, has turned to international markets for supplies.
It purchased two million barrels of U.S. WTI Midland crude on Wednesday, its first U.S. crude purchase since August, according to trade sources and shipping data.
Meanwhile NNPC is pursuing new markets for its crude oil. The company was in London on Wednesday seeking term customers for its new Utapate crude oil grade.
The refinery built by Nigerian billionaire Aliko Dangote in Lagos aims to compete with European refiners when operating at full capacity but it has struggled to
