Domestic crude must be available and commercially viable – Dangote Refinery

Dangote Refinery has clarified its stance on crude oil procurement following reports that it rejected 15.5 million barrels in Q2 2026. While the company is committed to sourcing Nigerian crude, it emphasizes the need for adequate volumes and competitive pricing. Devakumar Edwin, Group Vice President of Oil & Gas, stated that the key issue is not the volume offered under the Domestic Crude Supply Obligation (DCSO), but the availability of oil that meets commercial viability.

The refinery has consistently raised concerns about insufficient domestic crude availability and has faced situations where crude is offered at prices significantly above market benchmarks. Since the DCSO's introduction, Dangote has struggled to secure direct supplies from local producers, often having to rely on International Oil Companies (IOCs) and third parties.

This has introduced additional costs, making domestic crude less competitive. Edwin highlighted that the refinery's concerns lie with operational challenges and the Petroleum Industry Act (PIA) framework, which allows counterparties to withdraw without proper review, creating uncertainties. The company has only finalized negotiations for a limited number of DCSO cargoes, with many already committed to other buyers.

The refinery stresses the importance of reliable crude supply for maintaining local refining capacity, enhancing energy security, reducing imports, conserving foreign exchange, and boosting the domestic economy.