The Dangote Petroleum Refinery and Petrochemicals has alleged that the involvement of middlemen in the domestic crude oil market is driving up the cost of Nigerian crude and undermining the objectives of the Federal Government’s Domestic Crude Supply Obligation (DCSO) framework.

The refinery said that while it remains fully committed to purchasing Nigerian crude and supporting the DCSO, the policy can only achieve its objectives if crude is made available in adequate volumes and at commercially competitive prices.

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Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the key issue was not the volume of crude nominally offered to the refinery under the DCSO arrangement, but how much was genuinely available for purchase at commercially viable prices.

Edwin said the refinery had consistently raised concerns over inadequate access to domestic crude and had recently encountered instances where crude was offered at prices significantly above prevailing international market benchmarks.

“Our position is straightforward. We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices,” Edwin said.

He said the refinery must procure crude at prices that support sustainable operations and value creation, stressing that this was critical to maintaining the economics of domestic refining and ensuring the supply of affordable and competitively priced petroleum products to Nigerians.

According to him, since the commencement of the DCSO framework, Dangote Refinery has faced significant challenges in securing crude directly from domestic producers. Consequently, a substantial portion of the refinery’s crude supply under the arrangement has had to be sourced through International Oil Companies (IOCs) and third parties.

Edwin said the involvement of intermediaries often introduced additional premiums and transaction costs, which could push the price of Nigerian crude above internationally recognised benchmarks published by Platts and Argus.

“When additional layers of intermediaries introduce premiums, the cost of crude acquisition increases significantly, affecting the overall economics of domestic refining. Ultimately, higher crude costs translate into higher costs of refined petroleum products for the local market,” he said.

The refinery maintained that its concerns were not directed at the objective of the DCSO, which it strongly supports, but at the manner in which some aspects of the framework operate.

Edwin also raised concerns about provisions of the Petroleum Industry Act (PIA) that allow counterparties to withdraw from negotiations without a structured review process or adequate safeguards, saying such uncertainties could weaken the effectiveness of the domestic crude supply mechanism.

Dangote Refinery said that, excluding cargoes supplied under NNPC term contracts, it had concluded negotiations for only a limited number of DCSO cargoes since the scheme commenced.

In some cases, the company said, crude cargoes earmarked for domestic refining had already been committed to other buyers before negotiations with the refinery began.

The clarification followed reports referencing data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which indicated that Dangote Refinery rejected 15.5 million barrels of crude offered by local producers during the second quarter of 2026.

The refinery’s position is that such figures do not, by themselves, capture the commercial realities surrounding the offers, particularly whether the crude was directly available to the refinery and whether it was offered at prices that made economic sense for domestic refining.

The company said the experience demonstrated the need for greater transparency, improved market efficiency and commercially sustainable crude supply arrangements if Nigeria is to fully realise its refining potential.

Dangote Refinery reiterated that reliable access to competitively priced domestic crude is essential to maximising local refining capacity, strengthening Nigeria’s energy security and reducing dependence on imported petroleum products.

It added that ensuring efficient domestic crude supply would also help conserve foreign exchange and retain greater value within Nigeria’s economy.