The Dangote Oil Refinery has called on Nigeria’s upstream oil regulator to force producers to abide by a law that stipulates they supply local refineries, saying that lax enforcement was raising its operational costs.
The $20 billion 650,000-barrel-per-day capacity refinery, located in Lekki, Lagos State, built by Africa’s richest man Aliko Dangote, has struggled to get sufficient supplies from Nigeria, Reuters reported.
In a statement on Friday, Dangote Refinery said the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was yet to enforce the Domestic Crude Supply Obligation (DCSO), a provision that requires crude oil producers to supply domestic refiners with a portion of their production.
In the statement by Dangote Refinery, its spokesperson, Anthony Chiejina, said, “Our concern has always been that the NUPRC is pushing, but the international oil companies are not following the instructions.”
“Consequently, we often purchase the same Nigerian crude from international traders at an additional $3-$4 premium per barrel which translates to $3-$4 million per cargo.”
Dangote Refinery requires 325,000 bpd of supply, but since it started operating in January, it has received nearly half of that amount, according to available data.
