Dangote Petroleum Refinery and Petrochemicals has reiterated that it is willing to buy Nigerian crude oil, but only if supplies are available in adequate volumes and offered at commercially competitive prices aligned with prevailing market benchmarks. The statement comes after recent reports citing data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) suggesting the refinery rejected 15.5 million barrels of crude oil offered by local producers in the second quarter of 2026. Dangote disputed the framing of those figures, saying the central issue is not the volume nominally offered under the Domestic Crude Supply Obligation (DCSO) but the quantity genuinely available for purchase on viable commercial terms.
Devakumar Edwin, Group Vice-President, Oil & Gas and Fertiliser at Dangote Industries, said the refinery has consistently raised concerns about inadequate availability of domestic crude and, more recently, about crude being offered at prices significantly above international benchmarks such as Platts and Argus. “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, like every refinery, Dangote must procure crude that supports sustainable operations and value creation in order to deliver petroleum products to Nigerians at affordable and competitive prices.
Edwin noted that since the DCSO framework began, the refinery has faced significant challenges securing crude directly from domestic producers. As a result, a substantial portion of crude allocated under the arrangement has had to be sourced through international oil companies (IOCs) and third parties rather than directly from Nigerian upstream producers. He said this process often introduces additional premiums and transaction costs that can drive crude prices above internationally recognised benchmarks. “When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining. Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market,” he added.
NUPRC’s Q2 2026 DCSO report indicated that producers offered 68.1 million barrels of crude to Dangote Refinery during the quarter, while the facility accepted 52.6 million barrels, about 78 per cent of the volume offered. The commission reported that the refinery’s intake represented about 98 per cent of the 53.7 million barrels eventually supplied to all local refiners during the period. Dangote stressed that its concern is not with the intent of the DCSO policy, which it strongly supports, but with operational realities affecting implementation. The company highlighted aspects of the Petroleum Industry Act (PIA) framework that allow counterparties to withdraw from negotiations without a structured review process or adequate safeguards, creating uncertainties that can undermine the effectiveness of the domestic crude supply system.
The refinery said that, excluding cargoes supplied under NNPC term contracts, it has concluded negotiations for only a limited number of DCSO cargoes since the inception of the arrangement. In several instances, crude cargoes earmarked for domestic refining were reportedly already committed to other buyers before discussions with the refinery commenced. Dangote said these experiences reinforce the need for greater transparency, improved market efficiency and commercially sustainable supply arrangements that can support Nigeria’s refining ambitions. The company reiterated that reliable access to crude oil remains critical to maximising local refining capacity, strengthening Nigeria’s energy security, reducing reliance on imported petroleum products, conserving foreign exchange and creating greater value within the domestic economy.