Nigeria Considers Direct Crude Supply Reform for Dangote, Other Refineries

Nigeria is considering reforms to its crude oil allocation and pricing system to make Nigerian crude more accessible to domestic refineries, including the 650,000-barrel-per-day Dangote Refinery. Refiners say the current arrangement relies too heavily on intermediaries, adding an estimated $3 to $4 per barrel to processing costs. Proposed options include allowing oil producers to sell directly to nearby refineries and offering discounts where refiners collect crude at production sites. The NUPRC says compliance with the Domestic Crude Supply Obligation has improved to over 90 percent. However, refiners still face concerns about crude availability, quality and pricing. If approved, the reforms could reduce reliance on imported petroleum products and improve operations for both large and smaller Nigerian refineries.

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