BUSINESS DAY
Dangote Oil Refinery’s highly anticipated foray into the petrol supply market in July could be delayed due to a shortage of crude oil, industry sources have revealed.
The 650,000 barrels per day (bdp)-capacity refinery, located in Lekki, Lagos, was slated to begin operations this July, aiming to significantly reduce Nigeria’s reliance on imported petrol.
However, concerns are mounting that a lack of readily available crude oil could hinder Dangote’s ability to meet its petrol refining targets.
“The refinery is yet to receive the required volumes of crude oil needed to refine PMS for the July takeoff,” a source in the oil trading business said via phone.
Jide Pratt, country manager of Trade Grid, which supports a wide network of independent dealers across Africa, indicated that the Dangote refinery is unlikely to meet the July deadline.
“The issue of crude supply is still a major issue, and postulations on how the premium motor spirit (PMS) will be sold in USD are unattended to,” Pratt said.
He added, “A safe assumption may be August or September at best and December at worst.”
“It’s clear that subsidy still exists and the possibility of selling to NNPC is reduced, as it currently has trade account receivables with traders in excess of 160 days. The Dangote Refinery is a commercial entity and will unlikely toe this line of credit sales with its running cost and interest payments,” Pratt said.
Kalu Aja, a financial planning expert, questioned why Nigeria, the largest oil exporter in Africa, can’t produce enough oil for Dangote?
“If Dangote needs crude, Nigerian National Petroleum Company (NNPC) should support its 20 percent investment by giving Dangote its oil equity,” Aja said.
Hector Igbikiowubo, publisher of Sweet Crude Reports, said the essence of having the NNPC refineries working is to guarantee energy security for the Nigerian state.
“The question now is, how come the NNPC isn’t allotting all of its 445,000 barrels per day to the Dangote Refinery for refining?” Igbikiowubo asked on Channels TV program.
Efforts to reach Femi Soneye, chief communication officer of NNPC Ltd, proved abortive as he did not pick his calls.
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