A civil society organization, operating under the name Concerned Nigerian Citizens, has called on the Nigerian National Petroleum Company Limited to prioritize crude oil allocation to local refineries, including the Dangote Refinery, rather than foreign partners.
This call was made on Tuesday in Abuja amid concerns about an alleged plan by the NNPCL to reduce crude oil supply to Dangote Refinery.
Currently, the NNPCL allocates 300,000 barrels of crude per day to the refinery under the Federal Government’s naira-for-crude program.
Reports have surfaced that the NNPCL may reduce its crude allocation to Dangote Refinery following the restart of operations at the Warri and Port Harcourt refineries.
The combined capacity of these refineries is around 135,000 barrels per day.
Addressing journalists in Abuja, the CSO expressed concerns about the potential cut in crude oil supply to Dangote Refinery.
The group’s National Coordinator, Obinna Francis, accused the NNPCL of attempting to monopolize the oil sector, potentially harming local investors.
Francis pointed out that the removal of fuel subsidies has worsened the plight of Nigerians, with rising fuel prices pushing up the cost of goods and services across the nation.
He further expressed skepticism regarding the NNPCL’s claim that the Warri and Port Harcourt refineries are operating at 60-70 percent capacity.
Francis also emphasized that Dangote Refinery has been striving to make petroleum products more affordable for Nigerians.
He argued that cutting its crude oil supply would undermine this effort.
Echoing the views of oil marketers who have recommended the privatization of the Port Harcourt, Warri, and Kaduna refineries, the CSO noted that Dangote Refinery operates without costing Nigerian taxpayers, unlike the government-owned refineries.
The CSO called on President Bola Tinubu to intervene in the matter, warning that the actions of the NNPCL could be seen as having the President’s approval.
“We are not surprised that the NNPCL insists the Warri and Port Harcourt refineries are operating at 60-70 percent capacity. The goal from the start was to justify reducing the crude allocation to Dangote Refinery,” Francis stated.
“The Naira-for-crude initiative was meant to boost local production and protect against exchange rate volatility, not to reduce crude supply,” he added.
He continued by stating that the restart of the Warri and Port Harcourt refineries should aim to reduce the price of petrol and should not be used as an excuse to reduce crude oil allocations.
Francis also highlighted the NNPCL’s Project Leopard, which seeks to raise $2 billion in exchange for crude oil, and warned that the country’s debt burden would increase if this trend continued.
He also referenced Oando’s $500 million loan to the NNPCL and other loan operations, such as Project Gazelle, which have continued despite complaints from domestic refineries about unmet quotas.
He pointed out that the private sector has delivered better results than government-run entities, using the power and telecommunications sectors as examples.
The CSO urged that the same approach be applied to Nigeria’s refineries to prevent further financial losses.
“The Federal Government’s previous efforts to privatize refineries were thwarted in 2007 due to union pressure. In the years since, the country has spent billions on refinery maintenance with little improvement in operational capacity,” Francis noted.
“The Greenfield Refinery initiative, which involved a public-private partnership for expanding refining capacity, shows a clear path toward resolving this issue, with a planned 350,000 barrels per day refinery in Lagos,” he stressed.
The CSO’s statement calls for a reevaluation of crude oil allocation and a more transparent approach to enhancing local refinery operations for the benefit of all Nigerians.
