Dangote Refinery Accepts Only 78% of Crude Offered Amid Supply Challenges

Nigeria's domestic crude supply regime is facing a mismatch between what oil producers are offering and what refiners are actually taking. According to data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Dangote Refinery accepted only 52.6 million barrels of the 68.1 million barrels offered to it in the second quarter of 2023.

This leaves a 15.5 million-barrel gap, equivalent to about 22.8 percent of the crude offered to the refinery. The data highlights a commercial and logistical challenge emerging alongside the Federal Government's drive to ensure adequate crude supply to domestic refineries.

The NUPRC attributed the improved performance in DCSO compliance to increased domestic crude production and the emergence of long-term crude supply arrangements supported by bankable Sales and Purchase Agreements (SPAs). However, the difference between offers and actual refinery intake underscores the next challenge for Nigeria's domestic refining ambitions: turning crude availability into predictable commercial supply.

The NUPRC acknowledged the issue, saying the gap between the volume offered to Dangote and the quantity accepted underscores the need for continued coordination on commercial terms and logistics. The commission will continue enforcing the Domestic Crude Supply Obligation (DCSO) while using monthly stakeholder consultations to assign producers specific volumes to offer to licensed domestic refineries.