The failure to supply crude oil to domestic refineries, including the multi-billion dollar Dangote Refinery, has stalled the production of refined petroleum products at the facilities.
the 650,000 barrels per day Dangote refinery in Lagos missed the October production projection it had earlier set.
The October production target miss made it the second time in 2023 that Dangote Refinery would raise hopes of Africa, especially Nigeria, of a possible end to petrol importation. However, the failure to begin production means that Nigeria will continue to rely on fuel importation.
It was gathered on Wednesday that amid Nigeria’s continued imports of refined petroleum products, its domestic refineries that would have helped refine the commodities were being starved of crude oil.
About five more modular refineries are ready to commence the production of refined petroleum products but cannot produce the commodities because of the unavailability of crude oil, according to industry sources.
Also, industry sources stated that the Dangote Refinery in Lekki, Lagos, had yet to receive the required volumes of crude oil needed to produce refined products.
In September, the Executive Director, Dangote Group, Devakumar Edwin state that the firm would begin the production of up to 370,000 barrels per day of crude that would give rise to Automotive Gas Oil, popularly called diesel, and jet fuel in October 2023.
For petrol, the Dangote Group’s boss said the plant would produce it by November 30, 2023.
the crude oil supply situation to the plant had not improved, as the NNPCL was still finding it tough to provide the crude oil required for the Dangote refinery to commence the production of refined products.
Sources at the Nigerian Upstream Petroleum Regulatory Commission and Federal Ministry of Petroleum Resources confirmed this in Abuja on Wednesday.
“Officials from the Dangote Refinery visited the NUPRC recently to complain about the lack of crude oil required by the plant and why it would be odd for the company to be importing crude when Nigeria produces the commodity,”
the Secretary of CORAN, Olusegun Ilori, said about five modular refineries were ready.
Ilori stated, “We have a good number of our members that are ready to produce refined petroleum products, but the major problem limiting them, which is stopping their financiers, is the issue of guaranteed feedstock.
“That is, where are they going to get crude oil to refine? The Petroleum Industry Act has come, and it states that there must be a domestic supply of crude for those who want to refine.
“As I speak with you, we have about five or six more companies coming onboard and are ready to begin production. This is aside from the four modular refineries that are already producing. The four of them are facing a limited supply of crude,” Ilori stated.
Duport Edo Refinery, Walter Smith Refinery, and Niger Delta Refinery are among the modular refineries that are currently in operation. The facilities produce diesel but in limited volumes due to inadequate feedstock.
On why domestic refineries were being starved of crude, Ilori said, “It is because many of those producing the crude want to export it to earn dollars. Also, Nigeria still needs to meet the crude oil production quota approved by OPEC for export.
“So most crude oil producers don’t want to sell to local refiners because some are owing banks and have projected how to export the commodity to clear their debts.”
