The Nigerian National Petroleum Company Limited (NNPC) has announced its plan to allocate six million barrels of crude oil to the Dangote Refinery in December 2023.
This development comes in response to earlier reports of crude oil shortages causing delays in the take-off of the Dangote Refinery and several other refineries.
According to Punch, a top official from NNPC, who preferred to remain anonymous, confirmed to the allocation and revealed that plans for the signing of a sales and purchase agreement between the national oil company and the Dangote Refinery are underway.
News About Nigeria gatherer that the allocation of crude oil is part of efforts to bolster domestic refining and enhance energy security.
“In a major step towards boosting domestic refining and attaining energy security, NNPC Ltd 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,” the official said.
The deal is purely commercial, with no special discounts or rock-bottom pricing, according to insiders close to both parties.
Section 109 of the Petroleum Industry Act (2021) obligates the supply of domestic crude oil to refineries, including the Dangote Refinery. This supply is to be conducted on a willing buyer and willing supplier basis.
NNPC has also taken an equity stake in the Dangote Refinery. However, the failure to provide crude oil to domestic refineries, including Dangote’s facility, has delayed the production of refined petroleum products in these refineries.
The Dangote Refinery, with a capacity of 650,000 barrels per day, missed its October production projection.
This development highlights the importance of ensuring the consistent supply of crude oil to domestic refineries to end Nigeria’s reliance on fuel imports.