The 650,000-barrel-per-day capacity refinery, built by Africa’s richest man Aliko Dangote on the outskirts of Lagos for $20 billion, has struggled to get sufficient supplies from Nigeria, where vandalism and low investment impede oil production
A view shows part of Dangote oil refinery in Ibeju Lekki district, on the outskirts of Lagos, Nigeria, Aug. 7, 2019.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.
In a statement issued on Friday, Dangote Refinery accused the Nigerian Upstream Petroleum Regulatory Commission of failing to enforce the Domestic Crude Supply Obligation , a provision that requires crude oil producers to supply domestic refiners with a portion of their production. “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,” he said.
In a statement, the NUPRC said some producers were experiencing operational challenges while others had pledged most of their output to oil traders who financed drilling. It also said forcing them to raise their supply would violate their contracts.
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