Real reason Dangote refinery delays production as five modular refineries take-off

The failure to supply crude oil to domestic refineries, including the Dangote Refinery, has delayed production.

The development comes as the Dangote refinery has not met the October production deadline.

Dangote refinery misses production deadline twice in one year

This is the second time the refinery has missed its production date in 2023 since it was commissioned on May 22, 2023.

Industry watchers have said the failure of the refinery take-off has dashed the hopes of Nigeria ending petrol imports.

Punch reported that domestic refineries are being starved of crude oil supply, which would have helped to cushion the impact of petrol import amid Forex scarcity.

About five modular refineries have commenced production of refined petroleum products but need more crude oil to produce the commodity.

According to sources, the Dangote Refinery still needs to receive crude oil to begin production.

Dangote refinery confirms crude oil import

The Executive Director of the Dangote Group, Devakumar Edwin, has said that the Dangote refinery was importing crude oil and was expecting its first cargo in two weeks.

In an interview with S&P Global Commodity Insight, Edwin revealed that NNPC had promised its crude to other entities.

Legit.ng reported that the NNPC had entered into a crude oil swap deal with the Afreximbank for a $3 billion facility.

The Dangote refinery boss said that crude oil import by the facility was temporary as it would receive supply from NNPCL from November 2023.

Edwin revealed that the company would begin the production of 370,000 barrels daily of crude that would produce diesel and aviation fuel in October 2023.

He stated that the facility would commence petrol production by November 2023.

The company seems to have missed the deadline again this year despite Dangote promising at the facility’s commissioning that it would begin production at the end of July or the beginning of August.

As of Wednesday, November 1, 2023, the facility has yet to receive any crude oil supply required for production.

Five modular refineries begin production as FG moves to enforce crude supplies

Legit.ng reported that the Nigerian government mandated local oil firms to ensure an adequate supply of crude oil to local refineries before export.

Other modular refineries confirmed that International Oil Companies (IOCs) prefer exporting their crude to earn dollars than supply to domestic refineries.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced on Saturday, October 28, 2023, that more local refineries had issued notices to commence production of petroleum products.

The Commission revealed its plan to enforce crude oil supply to the local refineries.