₦airaland Forum

The Dangote Industries Limited (DIL) said local petrol prices will continue to increase as trading arms offer cargoes at $2-$4 per barrel above the Nigeria…

The Dangote Industries Limited (DIL) said local petrol prices will continue to increase as trading arms offer cargoes at $2-$4 per barrel above the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) official price.


Vice President of Oil & Gas, Dangote Industries Limited, Mr DVG Edwin stated this while responding to a statement by the Chief Executive Officer of NUPRC, Engr. Gbenga Komolafe, in an interview on ARISE News TV where he said: “it is ‘erroneous’ for one to say that the International Oil Companies (IOCs) are refusing to make crude oil available to domestic refiners, as the Petroleum Industry Act (PIA) has a stipulation that calls for a willing buyer-willing seller relationship.”

Edwin, in a statement Wednesday, insisted that International Oil Companies (IOCs) operating in Nigeria have consistently frustrated Dangote Refinery’s requests for locally produced crude as feedstock for its refining process.

Edwin said: “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 $4m 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 and urged the regulatory commission to take a second look at the issue of pricing.

He commended the NUPRC for its various interventions in the oil company’s crude supply requests from International Oil Companies (IOCs), and for publishing the Domestic Crude Supply Obligation (DCSO) guidelines to enshrine transparency in the oil industry.

He however said: “If the Domestic Crude Supply Obligation (DCSO) guidelines are diligently implemented, this will ensure that we deal directly with the companies producing the crude oil in Nigeria as stipulated by the PIA.”

Edwin further noted that the NUPRC has been very supportive of the Dangote Refinery as they have intervened several times to help it secure crude supply.

However, he said “The NUPRC Chief Executive was probably misquoted by some people hence his statement that IOCs did not refuse to sell to us. To set the records straight, we would like to recap the facts that aside from Nigerian National Petroleum Corporation Limited (NNPCL), to date, we have only purchased crude directly from one other local producer (Sapetro). All other producers refer us to their international trading arms.

“These international trading arms are non-value adding middlemen who sit abroad and earn margin from crude being produced and consumed in Nigeria. They are not bound by Nigerian laws and do not pay tax in Nigeria on the unjustifiable margin they earn.

“The trading arm of one of the IOCs refused to sell to us directly and asked us to find a middleman who would buy from them and then sell to us at a margin. We dialogued with them for 9 months and in the end, we had to escalate to NUPRC who helped resolve the situation,” Edwin stated.

https://dailytrust.com/iocs-selling-crude-at-4-per-barrel-above-market-price-dangote/

Even NNPC limited is a rent-seeking entity. What are they doing to deserve to be paid extra $5 per barrel?

What else does the gullible citizens expected from a monopoly? Free petrol? You hears that NNPC is not selling crude oil to Dangote Refinery because the Nigerian reserves have been mortgage for future loans and you think there is a future for energy needs as the mummified zombies of the Tinubu’s government overhyped this Refinery to the heavens? Aha unu wu sorry.

I remember when Air Peace boss was lamenting, agbados said if he cannot compete, he should shut up.

Now let's see what they'll say to the lamenting Dangote

Ah! Subhanallah!

Make everyone fear Allah o!

Dangote is putting up a fight I wonder how this will turn out

This regulatory Bodies across board are very very useless....
All of them are compromised entities.
Scrap them all.
Tell me one that is functional, except they are called out, function for some few days or weeks and go back to their old ways.

The FG must intervene as a matter of national priority and get crude oil to Dangote at the best possible price to fast track national growth.
This is the job of government

Recently the Indian president had to travel to Russia to meet with president Putin to sort out issues of similar nature

If it's onyema of airpeace that own dangote refinary we would be expectant and be shocked with surprises from him.
The guy is passionate n understand Nigeriand sufferings
But u see dangote... don't expect shishi from him just like he did with cement

This country is in strong need of decisive leadership.
I'm just tired of all this hanky panky.

These international trading arms are non-value adding middlemen who sit abroad and earn margin from crude being produced and consumed in Nigeria.

Wow! My neighbor produced yams from her farm, a very bountiful harvest. She's selling her yams. It's not cheap. I want to buy the yams at market rate from her. She refuses to sell to me, but insists I look for a shop owner in the market, let that shop owner come and buy from her, then sell to me.

No... The shop owner is not selling to me at the price he bought; he's selling to me at a premium, in addition to the market value I should have paid if I bought directly from my neighbor. This premium, has nothing to do with Nigeria law or government. No value added, no tax paid, no CSR, nothing!!! Just earn free money from me!!!

Oh... That shop owner turns out to be my neighbor's younger brother. The shop even belongs to my neighbor.


Again, I say WOW!!!

Even Dangote does not have access to the crude oil that’s in abundance in his father’s land, they even had to make him go all the way to the international market to source for it.

Shouldn't there be a law in place for each regime not to sell oil in advance above there tenure in office.

Funkyswagzz:
Dangote is putting up a fight I wonder how this will turn out

Some people might read this and would wish Abacha was still in power. R.i.p to the no-nonsense general.

Our crude oil has low sulphur content, hence the high price because of demand

AntiChristian:
Ah! Subhanallah!

Make everyone fear Allah o!

Why should they fear Allah? Wetin concern Allah with black man

DMerciful:
I remember when Air Peace boss was lamenting, agbados said if he cannot compete, he should shut up.

Now let's see what they'll say to the lamenting Dangote

Air peace was complaining about what exactly? Oya tell us
Everything to you is about tribe

Have you seen any northerner tribalize the challenges Dangote is going through?
This is how other tribes differ from you

Are you new in Nigeria?

Use google jare

NOETHNICITY:
Air peace was complaining about what exactly? Oya tell us

Racoon:
What else does the gullible citizens expected from a monopoly? Free petrol? You hears that NNPC is not selling crude oil to Dangote Refinery because the Nigerian reserves have been mortgage for future loans and you think there is a future for energy needs as the mummified zombies of the Tinubu’s government overhyped this Refinery to the heavens? Aha unu wu sorry.

Once in a while try to drop your agenda and make a reasonable contribution to the topic at hand. You must be at least 50...try to be normal. Please.

Standing5:
Even NNPC limited is a rent-seeking entity. What are they doing to deserve to be paid extra $5 per barrel?

It’s called premium fee, and it’s done everywhere. NNPCL’s charges were too high, so it had to be reduced.

"The NUPRC Chief Executive was probably misquoted by some people hence his statement that IOCs did not refuse to sell to us. To set the records straight, we would like to recap the facts that aside from Nigerian National Petroleum Corporation Limited (NNPCL), to date, we have only purchased crude directly from one other local producer (Sapetro). All other producers refer us to their international trading arms.

“These international trading arms are non-value adding middlemen who sit abroad and earn margin from crude being produced and consumed in Nigeria. They are not bound by Nigerian laws and do not pay tax in Nigeria on the unjustifiable margin they earn."


These are the key bottlenecks a serious government should focus on resolving.

You keep talking about ease of doing business and neglect the fundamentals.
Those local companies that are doing all these underhand deals by refering to their principal partners abroad should be heavily sanctioned by now...if local markets is not your first priority, then leave our country!!!

DMerciful:
Are you new in Nigeria?

Use google jare

Air peace and all of una na victim mentality people una be

We know una

DMerciful:
I remember when Air Peace boss was lamenting, agbados said if he cannot compete, he should shut up.

Now let's see what they'll say to the lamenting Dangote

instead of sticking to issues and raise objections you lots prefer to just make meaningless conversation
at end what do you people gain derailing conversations that affect the lives of Nigerians .. maybe they are still feeding you i don't get

Standing5:
Even NNPC limited is a rent-seeking entity. What are they doing to deserve to be paid extra $5 per barrel?

NNPC are the most dangerous set of Nigerians.
More deadly than politicians.

Sometimes its good to remind people that the rain does not fall on one man's roof alone. What goes around, comes around.

kayperry:
instead of sticking to issues and raise objections you lots prefer to just make meaningless conversation
at end what do you people gain derailing conversations that affect the lives of Nigerians .. maybe they are still feeding you i don't get

I knew where you were going but asking silly question

NOETHNICITY:
Air peace and all of una na victim mentality people una be

We know una

Hammylawali:
It’s called premium fee, and it’s done everywhere. NNPCL’s charges were too high, so it had to be reduced.

You said nothing sensible. Just because it has a name doesnt make it right. What is NNPC doing to deserve 5 usd per barrel. That's what is making NNPCL political and being headed by one dictatorial guy for so many years now. Until he is picked out and someone from outside his clique takes over, we wont know what is going on.

DMerciful:
Sometimes its good to remind people that the rain does not fall on one man's roof alone. What goes around, comes around.

Shut up