NNPC May Reduce Crude Supply to Dangote as 2 Nigerian Refineries Begin Operation
- The Nigerian National Petroleum Company Limited (NNPC) may adjust crude oil supplies to the Dangote Refinery
- The development became necessary as two Nigerian refineries commenced operations in 2024
- The NNPC currently supplies about 300,000 to Dangote Refinery out of the 445,000 barrels allocated to domestic refineries
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Depending on production output, the Nigerian government may reduce crude oil supply to the Dangote Refinery from 300,000 barrels daily.
Reports say this reduction is expected to begin as part of adjustments under the government’s naira-for-crude initiative as the Warri and Port Harcourt refineries began operations.
Source: UGC
Warri, PH refineries may cut crude supplies
The two Nigerian refineries operate at a combined capacity of 135,000 barrels per day and are managed by the Nigerian National Petroleum Company Limited (NNPC).
After several years of neglect by successive administrations, they began operations, leading to massive petroleum product imports.
Findings show that the planned crude reduction to the Dangotte facility was also based on the need to ensure a sufficient oil supply to all refineries operating in Nigeria.
The move aims to boost competition in the downstream sector, with the government aiding it via the naira-for-crude initiative.
Before the plan, the government allocated about 445,000 barrels daily to domestic refineries operated by the NNPC.
Dangote Refinery get 300,000 barrels daily
According to a Punch report, other refineries with smaller capacities were scheduled to receive allocations. Checks indicate that the Dangote Refinery received about 300,000 barrels daily out of the 450,000 approved by the government.
The deal was meant to last six months in the first phase and was subject to review by the Technical Sub-Committee on Domestic Sales of Crude Oil in Naira.
Per the report, the deal will undergo minor adjustments following the commencement of Nigeria’s two refineries, which produce 210,000 and 125,000 barrels, respectively.
Experts have said that if the NNPC slashes allocations to the 650,000 bpd-capacity refinery, petrol prices may increase as Dangote may resort to imports to compensate for the shortfall.
Marketers Explain Reason for New Cost
Legit.ng earlier reported that the Independent Petroleum Marketers Association of Nigeria (IPMAN) attributed the recent drop in petrol prices to the intense competition between Dangote and Port Harcourt refineries.
Findings show that as of December 29, 2024, most petrol stations had reduced their pump prices due to the drop in ex-depot prices in the two refineries.
According to reports, while NNPC Retail reduced its price from N1,030 to N965 per litre, other marketers reduced their prices from N1,070 to N1,020.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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