Dangote Refinery Facing Crude Shortfall, NNPC Falls Behind on Pledge
The Nigerian National Petroleum Corporation (NNPC) has committed to fulfilling its pledge to supply 300,000 bpd of kerosene to the Dangote Refinery, Africa's largest refinery with a capacity of 650,000 bpd. The refinery, valued at $20 billion, began operations in January after years of delays.
Despite the NNPC's promise, the refinery has received only five crude cargoes, a stark contrast to the expected 15. This shortfall has led the refinery to increase crude imports, turning to sources like Brazil and the U.S. due to insufficient domestic supply. Brokers have been charging a $4 mark-up per barrel for the imported crude, adding to the refinery's operational costs.
The NNPC, struggling with low production, is now trading some of its crude for gasoline imports. This strategy aims to alleviate the refinery's supply constraints and help it reach its targeted production level of 550,000 bpd this year, representing 85% of its capacity.
The Dangote Refinery, a significant investment in Nigeria's oil and gas sector, is working to overcome supply challenges. While it has received less crude than expected from NNPC, it is exploring alternative sources and trading strategies to meet its production targets.
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