Dangote Group, a Nigerian multinational industrial conglomerate and owners of Dangote Industries Limited has again accused International Oil Companies (IOCs) of obstructing its refinery operations.
In a statement released on Wednesday, July 17, 2024, the company claimed that the IOCs wereinsisting on selling crude oil to its refinery through their foreign agents.
The company argued that this practice would lead to an increase in local crude prices, as trading arms are offering cargoes at $2 to $4 per barrel above the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) official price.
In the state, the Vice President of Oil & Gas, Dangote Industries Limited Devakumar Edwin aid, “When cargoes are offered to the oil company by the trading arms, it is sometimes at a $2-$4 (per barrel) premium above the official price set by NUPRC.”
Dangote Industries commended the NUPRC for its interventions in the company’s crude supply requests from IOCs and for publishing the Domestic Crude Supply guidelines.
Oil producers prioritising Asian countries
However, the company alleged that foreign oil producers appear to be prioritising Asian countries in their crude sales, exacerbating the pricing issues in the local market.
Mr Edwin added, “As an example, we paid $96.23 per barrel for a cargo of Bonga crude grade in April (excluding transport). The price consisted of $90.15 dated Brent price + $5.08 NNPC premium (NSP) + $1 trader premium.
“In the same month, we were able to buy WTI at a dated Brent price of $90.15 + $0.93 trader premium including transport.”
He said that when NNPC subsequently lowered its premium based on market feedback, it was too high, resulting in some traders asking the company for a premium of up to $4 million over and above the NSP for a cargo of Bonny Light.
According to Mr Edwin, the data on platforms like Platts and Argus show that the price offered to Dangote Industries is way higher than the market prices tracked by these platforms.
Recall that in June, Dangote Industries accused IOCs of manipulating crude oil prices and further frustrating the refinery’s survival.
Mr Edwin then said that the IOCs in Nigeria were doing everything possible to frustrate the survival of Dangote Oil Refinery and Petrochemicals.
