Dangote Refinery Backs NUPRC Rule, Urges Oil Coy. to Sell Crude at Market Prices

Dangote Industries Limited (DIL) has restated the claim that international oil companies (IOCs) are raising the price of crude oil beyond the market rate, while also supporting the new supply guidelines set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Mr Devakumar Edwin, the Vice President of Dangote Industries, made these remarks in a statement on Wednesday in Lagos.
According to Edwin, IOCs in Nigeria have consistently hindered Dangote Refinery’s attempts to obtain locally produced crude oil for its refining process.
He mentioned that the trading arms provide cargoes at a price of $2-$4 per barrel higher than the NUPRC’s official rate.
“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.
“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.
“When NNPC subsequently lowered its premium based on market feedback that it was too high, some traders then started asking us for a premium of up to $4 million over and above the NSP for a cargo of Bonny Light.
“Data on platforms like Platts and Argus shows that the price offered to us is way higher than the market prices tracked by these platforms.
“We recently had to escalate this to NUPRC”, Edwin said.

Source: nairametrics.com

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