Chief Executive Officer of the 650,000-barrel-per-day Dangote Petroleum Refinery, David Bird has disclosed that the facility has been forced to procure Nigerian crude grades from international middlemen at a staggering premium of more than $18 per barrel due to shortfalls in domestic crude allocations.
Speaking on ARISE News, Bird explained that while the refinery has a pre-agreed arrangement to receive between 13 and 15 cargoes per month, it is currently receiving only five.
This deficit has forced the merchant refinery to source approximately 30 to 40 percent of its crude from global markets to maintain operations.
Bird noted that the $18 premium represents significant capital leaking from the Nigerian economy to the international trading community, a cost that may eventually impact local consumers.
The supply gap highlights ongoing challenges within the Federal Government’s crude-for-naira program. Although the initiative was designed to stabilize the national currency by allowing domestic refiners to pay in Naira, inconsistent delivery has blunted its effectiveness.
Bird clarified that the program is not a subsidy, as crude is priced at full international benchmarks, but emphasized that the refinery often fails to receive its preferred crude grades tailored to its specific hardware configuration.
Beyond immediate supply concerns, Bird described the current situation as a cost-of-living crisis heavily influenced by energy costs.
He advocated for the establishment of strategic petroleum reserves to mitigate future supply chain vulnerabilities.
Despite these operational hurdles, the CEO expressed optimism regarding the refinery’s upcoming public listing, termed the people’s IPO, which aims to be one of the most widely subscribed initial public offerings globally.