November 6, 2023 [The Tide]-  The Nigerian National Petroleum Company Limited (NNPCL) has said it is set to provide six million barrels of crude oil to the Dangote Refinery.

There are allegations in various quarters that crude oil shortage was delaying the take-off of Dangote refinery and five others, as the Federal Government admitted that the lack of supply to Dangote was shameful and blamed it on low oil production.

In a major step towards boosting domestic refining and attaining energy security, a top official of the NNPCL, who wish to be ananymous, said the oil firm  is set to allocate six million barrels of crude oil to Dangote Refinery in December 2023.

The official added, “This development came as plans have since been firmed up for the signing of a sales and purchase agreement between the national oil company and the refinery, taking place soon in Abuja”.

Meanwhile, insiders close to both parties confirmed that the deal was purely on a commercial basis and without any recourse to discount, or selling at rock-bottom prices, as speculated by a section of the media.

Section 109 of the Petroleum Industry Act (2021) stipulates domestic crude oil supply obligations to refineries, including the Dangote Refinery, NNPCL refineries in Port-Harcourt, Warri, Kaduna and modular refineries.

The section also provides that the supply of crude oil to the domestic market shall be on a willing buyer and willing supplier basis.

The NNPCL has already taken an equity stake in the Dangote refinery and will start supplying crude oil to the facility.

It was earlier reported that the failure to supply crude oil to domestic refineries, including the multi-billion dollar Dangote Refinery, had stalled the production of refined petroleum products at the facilities.

The report stated that this was also as 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 in 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 till NNPCL begins crude oil supply to the plant in December this year.

The report revealed 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.

It stated that about five more modular refineries were ready to commence the production of refined petroleum products but could not produce the commodities because of the unavailability of crude oil, according to industry sources.

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