The Dangote Petroleum Refinery reported that the Federal Government did not meet its crude oil delivery targets under the naira-for-crude plan.
According to Devakumar Edwin, Vice President of Dangote Industries Limited, the crude supplied from Nigerian National Petroleum Company Limited so far is insufficient to meet the refinery's demand for increased refined product output.
Edwin indicated that NNPCL had failed to satisfy its obligation to provide at least 385,000 barrels per day (bpd) since the effort began in October, according to Reuters.
The supply deficiency limits the refinery's ability to achieve optimal production levels.
"We need 650,000 barrels a day. NNPCL pledged to provide a minimum of 385,000 bpd, but they are not even delivering that," the Dangote official stated.
In July, the Nigerian government unveiled a plan to address issues in getting foreign money by selling crude oil priced in naira to local refineries. The plan, set to run for six months beginning in October, aimed to reduce dependency on foreign exchange for oil purchases while increasing domestic refining capacity.
According to reports last month, four cargoes of crude oil were supplied to the Dangote Petroleum Refinery as part of the naira-for-crude scheme. However, sources acquainted with the local crude sale arrangement stated that the refinery is still waiting for more cargoes to meet its operational requirements.
Less than two months into the program, the project appears to be underperforming, pushing the refinery to consider crude purchases from the United States to support refining operations.
The $20 billion Dangote Petroleum Refinery is intended to compete with European refineries when fully operational.
However, it has had severe difficulty in obtaining enough crude oil supplies to operate properly.
Confirming this, Mathins Obaze, the acting Executive Director of the Crude Oil Refinery-Owners Association of Nigeria, stated that Dangote is the only receiver of the naira-denominated crude sale agreement among Nigeria's eight operational refineries.
"Members are still unable to access crude in naira and are currently engaging the government for a resolution," Obaze disclosed.
The reason for the crude oil supply shortage to the Dangote Petroleum Refinery is unknown, as NNPCL has not replied to demands for information.
In August, the refinery urged the Nigerian Upstream Petroleum Regulatory Commission to enforce legislation mandating oil producers to supply local refineries with crude.
However, the NUPRC has kept mute on the subject, making enforcement and resolution questionable.
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