A new report by S&P Global has revealed that the United States is a major supplier of crude oil to Nigeria’s Dangote Refinery, accounting for 30 per cent of the total 47 cargoes delivered to the facility thus far.
Indeed, there are indications that the United States may become the biggest supplier of crude to local refineries, leveraging its production capacity and pricing. This is coming years after Nigeria ceased to be the major supplier of crude to the United States.
According to the report, the plant has scaled to 400,000 bpd and delivered diesel, jet fuel, naphtha and fuel oil to both domestic and export markets while petrol, Nigeria’s primary fuel type, is expected to be produced from mid-August.
“While traders hinted that the U.S. grade could rival domestic supply on pricing in the long term, its status as a staple of the Dangote diet now looks increasingly uncertain,” the report reads.
“Difficulties in accessing foreign exchange have left PetroChina vessels loaded with WTI Midland sitting off the refinery for weeks, with the Chinese firm reportedly reluctant to swap crude for products.”
S&P Global said aside from these issues, crude flows in and out of the Dangote refinery have been felt in other markets — especially in Europe, the largest consumer of light, sweet Nigerian crude.
S&P Global Commodities at Sea (CAS) data showed European imports of Nigerian crude have decreased since January — with only imports of US oil falling more.
According to the data, Brazil, Egypt, Libya, and Guyana have increased supply.
Following last week’s directive by President Bola Tinubu, a coalition of Civil Society Organisations (CSOs) has announced their intention to closely monitor the compliance of the Nigerian National Petroleum Company Limited (NNPCL) in its crude oil sales to Dangote Refinery in naira.
This move, according to the CSOs aims to ensure transparency and adherence to regulatory standards in the dealings between the state oil firm and the privately-owned refinery.
The CSOs made this known during a facility tour of the 650,000 bpd refinery in Lagos. Speaking, Solomon Adodo of the Rise Up for A United Nigeria, spoke on behalf of the 28 CSOs through a statement issued on Monday.
Adodo expressed dismay over the government’s apparent reluctance to support the local refinery, despite its potential to alleviate the nation’s fuel crisis and foreign exchange challenges.
The group further accused the NNPCL of disregarding President Tinubu’s directive to sell crude oil to the Dangote Refinery in naira. The CSOs vowed to intensify advocacy efforts to compel the government to prioritise the Dangote Refinery and ensure its smooth operation.
The Vice President of Dangote Industries Limited, Devakumar Edwin, echoed the CSOs’ concerns, highlighting the refinery’s potential to transform Nigeria’s economy.
Meanwhile, oil marketers have called on President Tinubu to investigate the activities of NNPC, Depots and Petroleum Products Marketers Association (DAPPMA), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). In a statement on Monday, the oil marketers alleged shady deals between NNPC, DAPPMA, and the NMDPRA.
The marketers also called for a downward review of the ex-depot price of petrol, adding that NNPC, being the sole importer of petrol, now put them “at the mercy of DAPPMA (the tank farm owners)”.
They said the NNPC sells petrol to the private depot owners operating under the DAPPMA at an ex-depot price of N556.5 per litre. However, the tank farm owners, according to the retailers, sell petrol to oil marketers at N700-N740 per litre, leaving them with little or no marginal profit to sell at retail stations.
The oil marketers urged the federal government to sanitise the distribution chain by pressing the NNPC and its regulatory arm, the NMDPRA, to insist on an ex-depot price for the tank farm owners.
