Dangote Refinery: Domestic Crude Must Be Available and Commercially Viable

Dangote Petroleum Refinery and Petrochemicals has clarified its stance following reports suggesting it rejected 15.5 million barrels of crude offered by local producers in the second quarter of 2026. The company remains committed to sourcing Nigerian crude oil and supporting the Domestic Crude Supply Obligation (DCSO) framework.

However, Dangote Industries Limited's Group Vice President, Oil & Gas and Fertiliser, Devakumar Edwin, emphasized that crude oil must be both available in adequate volumes and offered on commercially competitive terms to ensure the sustainability of domestic refining and affordable petroleum products for Nigerians.

Edwin clarified that the central issue is not the volume of crude offered under the DCSO arrangement, but its genuine availability at competitive market prices. The refinery has consistently raised concerns about inadequate availability and has encountered situations where crude is offered significantly above market benchmarks. The Group Vice President stressed that Dangote remains ready to purchase Nigerian crude at competitive prices, but the refinery has faced challenges securing supplies directly from domestic producers since the DCSO framework's inception.

As a result, much of the allocated crude has been sourced through IOCs and third parties, often introducing additional premiums and transaction costs that make domestically sourced crude less competitive than international options.

Edwin highlighted the refinery's concern with operational realities affecting DCSO implementation, particularly aspects of the Petroleum Industry Act (PIA) allowing counterparties to withdraw from negotiations without structured review processes. The refinery has only concluded negotiations for a limited number of DCSO cargoes since its inception, with many ECs earmarked for domestic refining reportedly already committed to other buyers.

Edwin emphasized the need for greater transparency, improved market efficiency, and commercially sustainable supply arrangements to support Nigeria's refining ambitions.