BUSINESSDAY
Dangote Industries Limited (DIL) has fired back at claims by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that International Oil Companies (IOCs) are willing to sell crude oil to domestic refiners.
Dangote argues that IOCs are making it difficult to access local crude, often forcing them to use expensive middlemen and pay inflated prices.
Devakumar Edwin, vice-president at DIL directly contradicted NUPRC CEO Gbenga Komolafe’s statement that the Petroleum Industry Act (PIA) ensures a “willing buyer-willing seller relationship” for crude.
Edwin claims that while only one local producer, Sapetro, sells directly to DIL, others rely on non-Nigerian trading arms that add unnecessary costs.
Edwin said, “The NUPRC has been very supportive to the Dangote Refinery as they have intervened several times to help us secure crude supply. However, the NUPRC chief executive was probably misquoted by some people hence his statement that IOCs did not refuse to sell to us. To set the records straight, we would like to recap the facts below.”
He detailed how only one local producer, Sapetro, sold directly to DIL, while other producers directed them to international trading arms acting as costly middlemen.
“These international trading arms are non-value adding middlemen who sit abroad and earn margin from crude being produced and consumed in Nigeria. They are not bound by Nigerian laws and do not pay tax in Nigeria on the unjustifiable margin they earn,” Edwin said.
Edwin recounted an instance where an IOC’s trading arm refused direct sales and insisted on involving a middleman, leading to a nine-month negotiation until NUPRC intervened. He also pointed out that international trading arms prioritize foreign buyers like Indonesia’s Pertamina, often leaving Nigerian refiners waiting.
