The much-anticipated rollout of petrol from the Dangote Petroleum Refinery has been delayed yet again, as marketers await the first deliveries. The Dangote Group, led by President Alhaji Aliko Dangote, had initially projected that the refinery would begin producing petrol between August 10 and 12, 2024. However, recent findings suggest that the refinery may not meet this timeline.
The 650,000 barrels per day (bpd) refinery was expected to begin operations today, Monday, August 12, 2024. But sources close to the development confirmed that while preparations are in top gear, the refinery may not start production until later in August.
The delay is primarily attributed to ongoing challenges with crude oil supply. A top official at the refinery, who spoke on the condition of anonymity, confirmed that the refinery is fully prepared to start production but is hampered by inconsistent crude supplies.
“All is set. The refinery will roll out petrol this month. However, its concern is that the refinery cannot stop for one minute; it needs a constant supply of crude to keep going,” the official disclosed.
Despite the preparations, the refinery is still awaiting a substantial crude oil supply from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Specifically, the refinery expects 29 million barrels of crude, which is yet to be delivered. The delay in receiving this supply is a significant setback for the refinery, which was supposed to commence petrol production today.
Petrol marketers across Nigeria have been on high alert, anticipating the release of the first batch of Premium Motor Spirit (PMS) from the Dangote Refinery. However, they remain in a waiting game as the refinery grapples with its crude supply issues.
One source within the refinery confirmed that despite these challenges, the facility is “100 percent ready” to commence the sale of PMS by the end of August. “I can confirm to you that we will start the sale of PMS this August, though the low supply of crude oil has always been affecting the process. But from the information at my disposal, we are 100 percent ready for the supply of PMS,” the source stated.
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The refinery’s delay has also sparked a public exchange between the Dangote Group and the NUPRC. The Dangote Group has accused the NUPRC of failing to enforce the Domestic Crude Supply Obligations (DCSO) regulations, which has left the refinery short of the crude needed to begin operations.
In response, the NUPRC refute these claims, asserting that it had facilitated the supply of over 29 million barrels of crude oil to the Dangote Refinery from January to June 2024. According to the NUPRC, the refinery has benefited significantly from the domestic crude allocation, more than other refineries in Nigeria.
“A breakdown shows that nine refineries have benefitted from the 32,088,122 barrels of crude as Dangote alone enjoyed 29,047,098 barrels out of the total supply between January to June 2024,” the NUPRC stated.
The commission detailed that other beneficiaries include the Warri Refinery, which received 949,670 barrels; the NDPR Refinery, with 823,395 barrels; and the Port Harcourt Refinery, which was allocated 471,123 barrels. Despite these allocations, the Dangote Refinery remains in a tight spot as it still awaits the promised 29 million barrels.
As the refinery prepares for its delayed rollout, there are concerns about meeting future crude supply needs. According to sources, the Dangote Refinery requires 15 cargoes for September, yet only six have been supplied so far. This shortfall may necessitate additional imports, which could further delay production.
The current situation underscores the complex dynamics of Nigeria’s oil industry, where logistical and regulatory challenges continue to impact major projects. As marketers wait for the refinery’s first petrol deliveries, the eyes of the nation remain on the Dangote Refinery, with hopes that it will soon fulfill its promise to alleviate Nigeria’s fuel supply challenges.
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