Nigerian refineries, including the Dangote Refinery, have increased their domestic crude oil requirements for the second half of 2024 to 597,700 barrels per day (bpd), up from 483,000 bpd in the first half, according to the national oil regulator.
This comes despite tight domestic supply. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported that it could only secure 177,777 bpd from oil producers during the first six months of the year, significantly below the refiners’ requested amount, Reuters reported.
The refineries’ increasing crude requirements, coupled with oil producers’ difficulties in meeting demand, have created tension between the 650,000-bpd Dangote Refinery and the national regulator.
The Dangote Refinery has accused the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of failing to enforce a law that mandates oil producers to supply domestic refiners. The refinery claimed that the lack of strict enforcement is driving up its operational costs.
The Dangote Refinery, Africa’s largest, has expressed concerns over having to increase crude imports due to insufficient domestic supplies, which it says could hinder its ambitions for the year and affect its long-term prospects.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) responded by stating that oil producers are struggling to meet the refinery’s demands because of various operational challenges.
The NUPRC also noted that forcing producers to increase their supply to domestic refiners would breach existing contracts.
In its statement on Friday, the regulator also projected national average crude oil production of 1.7 million bpd by December 2024, higher than the 1.57 million bpd it projected for January through July, which producers did not meet.
“This comprehensive data provides insight into the projected crude oil needs for the refineries, crucial for understanding the energy landscape in Nigeria for the second half of 2024,” Gbenga Komolafe, head of the NUPRC said in the statement.
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), eight refineries are expected to become operational starting in August, with a combined refining capacity of 864,500 barrels per day (bpd).
This would require oil producers to supply over half of that capacity. A total of 52 oil producers, including major companies such as TotalEnergies, Chevron, Shell, and ExxonMobil, are set to provide the crude, primarily from their joint venture operations with Nigeria’s state oil company, the NNPCL.
