The Dangote Refinery, Africa’s largest, has finally started producing fuels after years of delays but now faces accusations from senior officials that international oil companies (IOCs) are deliberately obstructing its operations. According to Devakumar Edwin, a vice president at Dangote Industries Limited, these IOCs are demanding exorbitant premiums for locally produced crude oil or claiming it’s unavailable, which could bankrupt the refinery. This battle suggests a high-stakes conflict over Nigeria’s oil industry, where Dangote aims to meet all domestic fuel demands and export surpluses, while the IOCs allegedly prefer Nigeria remain an exporter of crude oil rather than a producer of refined petroleum products.
International oil corporations operating in Nigeria are attempting to disrupt the operations and profit margins of Africa’s largest refinery, Dangote, by demanding exorbitant premiums for domestically produced petroleum, according to a top executive at the facility.
The Dangote Refinery in Nigeria, Africa’s largest, began producing fuels in January 2024, marking the refinery’s start-up after years of delays.
Now a senior official accuses foreign corporations operating in the country of “plotting” to bankrupt the refinery.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude,” Devakumar Edwin, Vice President, of Oil and Gas at Dangote Industries Limited (DIL), told Nigerian media this weekend.
“It seems that the IOCs’ objective is to ensure that our Petroleum Refinery fails. It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude is not available,” Edwin told Nigerian reporters.
The refinery had to pay $6 a barrel more than the market price at one point, the official added.
“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports crude oil and imports refined petroleum products,” according to Edwin.
The Dangote refinery, with a processing capacity of 650,000 barrels per day (bpd), is anticipated to supply 100% of Nigeria’s demand for all refined petroleum products while also producing a surplus for export.
The refinery plans to export diesel to European consumers and gasoline to Latin American and African markets. However, researchers at Facts Global Energy predict that production of Euro V gasoline, which meets Europe’s emissions criteria, will not begin until late 2024.
Aliko Dangote, Africa’s richest man, is planning to establish a trading firm to manage crude supply for Nigeria’s new mega-refinery, Reuters reported in March, citing various sources familiar with the project.
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