Dangote Petroleum Refinery and Petrochemicals has clarified reports suggesting that it rejected 15.5 million barrels of crude oil offered by local producers under the Domestic Crude Supply Obligation (DCSO) framework in the second quarter of 2026.
The refinery said it remains committed to purchasing Nigerian crude oil and supporting the objectives of the DCSO policy, but stressed that crude must be available in sufficient quantities and at commercially competitive prices.
The Group Vice President, Oil & Gas and Fertiliser at Dangote Industries Limited, Devakumar Edwin, said the major issue was not the volume of crude nominally allocated to the refinery but the quantity that was genuinely available for purchase under viable commercial terms.
Edwin said the refinery had consistently raised concerns over the inadequate availability of domestic crude and had recently encountered offers priced significantly above prevailing international market benchmarks.
“Our position is straightforward. We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices,” Edwin said.
He explained that since the introduction of the DCSO framework, the refinery had experienced difficulties obtaining crude directly from domestic producers.
As a result, he said a significant portion of the refinery’s crude requirements under the arrangement had been sourced through International Oil Companies (IOCs) and third parties, rather than directly from Nigerian upstream producers.
According to Edwin, the involvement of intermediaries often adds premiums and transaction costs, making some locally sourced crude more expensive than alternative supplies available on the international market.
He warned that higher crude acquisition costs could ultimately increase the cost of refined petroleum products in the domestic market.
Edwin said Dangote Refinery supports the DCSO policy but has concerns about some operational aspects of its implementation, including provisions of the Petroleum Industry Act (PIA) that allow counterparties to withdraw from negotiations without a structured review process or adequate safeguards.
He said such uncertainties could undermine the effectiveness of the domestic crude supply system.
The company further disclosed that, apart from cargoes supplied under NNPC term contracts, it had concluded negotiations for only a limited number of DCSO cargoes since the scheme began.
In some cases, Dangote said, crude cargoes designated for domestic refining had already been committed to other buyers before negotiations with the refinery commenced.
The refinery called for greater transparency, improved market efficiency and commercially sustainable crude supply arrangements to support Nigeria’s refining ambitions.
It reiterated that reliable access to domestic crude is essential to maximising refining capacity, strengthening energy security, reducing dependence on imported petroleum products, conserving foreign exchange and retaining more value within the Nigerian economy.
