The Federal Government is considering reducing the crude oil supply to Dangote Petroleum Refinery from 300,000 barrels per day unless Nigeria’s oil production increases significantly, as reported by The PUNCH on Wednesday.
This decision is part of the government’s naira-for-crude program, following the recent opening of the Warri and Port Harcourt refineries which process a combined 135,000 barrels per day.
These refineries, operated by the Nigerian National Petroleum Company Limited (NNPCL), were previously ignored in favor of fuel imports.
The reduction in crude allocation to Dangote Refinery is intended to create fair distribution among all local refineries and stimulate competition in the downstream sector.
The naira-for-crude initiative, implemented last year, initially allocated 450,000 barrels daily to domestic refineries, with Dangote Refinery receiving 300,000 barrels as part of the allocation.
A source close to the development revealed that with the Warri and Port Harcourt refineries now operational and additional facilities like Kaduna and the BUA refinery expected to join soon, the crude supply to Dangote Refinery will likely be reduced.
“The current 300,000 barrels allocated to Dangote Refinery will have to be shared among all refineries, given the increasing demand,” the source explained, adding that improved crude oil production remains the only sustainable solution.
