Dangote Refinery breaks silence on rejected 15.5m barrels, says price not volume is the problem

Dangote Petroleum Refinery has pushed back against official data showing it rejected 15.5 million barrels of Nigerian crude in the second quarter of 2026, insisting the real issue is commercial terms, not supply availability.

Devakumar Edwin, Group Vice President for Oil, Gas and Fertiliser at Dangote Industries Limited, said crude sold by local producers above international market rates threatens the financial logic of domestic refining and could eventually drive up pump prices for Nigerian consumers.

Refinery challenges NUPRC figures

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had published data showing the refinery rejected 15.5 million barrels of crude offered by domestic producers under the Domestic Crude Supply Obligation (DCSO) framework in Q2 2026.

Edwin argued that the figures do not tell the full story. He said the statistics failed to distinguish between crude formally allocated on paper and volumes genuinely available on commercially competitive terms.

According to Edwin, the refinery has faced persistent difficulties securing sufficient Nigerian crude directly from domestic producers since the DCSO framework took effect.

What Dangote says it needs

"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 said the refinery must buy crude at prices that make operations financially sustainable, and that this directly affects what Nigerian consumers eventually pay for petroleum products.

Edwin added that a large share of the refinery's crude supply under the DCSO arrangement has had to come through International Oil Companies (IOCs) and other third parties, because direct purchases from domestic producers have proved difficult to secure.

Those extra transaction layers, he said, typically introduce premiums and additional costs that can push the price of Nigerian crude above what the refinery could pay for alternative supplies on the international market.

Supply appears adequate on paper

NUPRC's Q2 DCSO statistics showed that Dangote Refinery required 63 million barrels during the quarter, while domestic producers offered a higher volume of 68.1 million barrels.

On the surface, the figures suggest supply was not the problem. Edwin's response, however, centres on price rather than volume, with the refinery insisting that being offered crude is meaningless if the terms attached make domestic sourcing commercially unworkable.

For Nigerian consumers, the standoff matters. If Dangote cannot source local crude at competitive prices, the refinery may turn to international markets, and those extra costs could eventually show up in the pump price of petrol and other refined products.