LAGOS, Nigeria — Dangote Petroleum Refinery and Petrochemicals has reaffirmed its commitment to sourcing Nigerian crude oil but said domestic supplies must be available in sufficient volumes and offered at commercially competitive prices to support sustainable refining operations.
The clarification follows recent reports citing data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicating that the refinery rejected about 15.5 million barrels of crude oil offered by domestic producers in the second quarter of 2026.
Dangote Refinery said the figures should be viewed in the context of the commercial terms and actual availability of the crude offered under Nigeria’s Domestic Crude Supply Obligation (DCSO) framework.
The company stressed that it remains committed to the objectives of the DCSO and to buying Nigerian crude, but argued that crude volumes listed as allocated or offered do not necessarily represent crude that is physically available for purchase at commercially viable prices.
Dangote: Focus should be on commercially available crude
Group Vice President, Oil & Gas and Fertiliser at Dangote Industries Limited, Devakumar Edwin, said the key issue is not simply the volume of crude nominally offered to the refinery but the quantity that can actually be purchased under sustainable commercial conditions.
According to Edwin, Dangote Refinery has consistently raised concerns over the availability of sufficient domestic crude supplies.
More recently, he said, the refinery has encountered instances where Nigerian crude was offered at prices significantly above prevailing international market benchmarks.
“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.
He added that the refinery, like any other commercial operation, must procure feedstock at prices that support sustainable operations and value creation.
“This is essential to maintaining the economics of domestic refining and enabling us to deliver petroleum products to Nigerians at affordable and competitive prices,” he said.
DCSO implementation remains a challenge
The Dangote Refinery executive said the company has faced significant difficulties securing crude directly from domestic producers since implementation of the DCSO framework.
As a result, a substantial proportion of crude allocated under the arrangement has had to be sourced through international oil companies (IOCs) and third-party suppliers, rather than directly from Nigerian upstream producers.
According to Dangote, additional intermediaries can introduce premiums and transaction costs that increase the final acquisition price of crude.
The company said such costs can push domestic crude prices above internationally recognised benchmarks published by market intelligence agencies including Platts and Argus.
In some cases, Dangote said, the resulting pricing makes Nigerian crude less competitive than alternative supplies available in the international market.
Higher crude costs could affect fuel prices
Edwin warned that the commercial structure surrounding domestic crude supply has implications beyond the refinery’s procurement costs.
“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining,” he said.
“Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market.”
The refinery’s position highlights a central challenge facing Nigeria’s effort to expand domestic refining: ensuring that local crude producers and domestic refiners can transact on terms that are commercially sustainable for both sides.
The DCSO, established under Nigeria’s petroleum sector regulatory framework, is intended to ensure that domestic refineries have access to crude oil produced within the country.
For refiners, however, the availability of crude is only one part of the equation. The price, quality, delivery terms, volumes and reliability of supply also determine whether domestic refining can compete with imported petroleum products.
Nigeria’s domestic refining ambitions face supply test
Dangote Refinery’s clarification comes as Nigeria seeks to reduce its dependence on imported refined petroleum products and strengthen domestic refining capacity.
The refinery, with a nameplate capacity of 650,000 barrels per day, has become a major component of the country’s strategy to increase domestic petroleum product supply and potentially position Nigeria as a regional refining and export hub.
For that strategy to reach its full potential, the refinery and other domestic plants will require reliable access to competitively priced crude.
The dispute over the interpretation of DCSO volumes therefore points to a broader issue in Nigeria’s oil value chain: the difference between crude being allocated on paper and crude being commercially available for delivery.
For Dangote Refinery, the message is clear — Nigerian crude remains its preferred feedstock, but domestic sourcing must be supported by sufficient volumes, transparent transactions and competitive market pricing.
That, the company argues, is essential not only for refinery economics but also for ensuring that Nigeria’s drive towards domestic refining translates into more affordable and reliable petroleum products for consumers.
