NNPC Reduces Stake in Dangote Refinery to 7.2% to Invest in CNG Initiative
The Nigerian National Petroleum Company (NNPC) Limited has reduced its stake in the $20 billion Dangote Petroleum Refinery from 20% to 7.2%, in a strategic move to invest in Compressed Natural Gas (CNG) as part of the federal government’s initiative to provide relief from the economic impact of the fuel subsidy removal.
NNPC spokesperson, Femi Soneye, explained the decision during an appearance on the Brekete Family programme, emphasizing that the investment in CNG aligns with global trends toward cleaner and more affordable energy sources. “We observed that CNG is very cheap and all over the world, people are investing in clean and cheaper alternative energy. That is why the NNPC is building different CNG stations everywhere. We understand that with ₦10,000, Nigerians can fill their cars and use it for two weeks,” Soneye stated.
He further clarified that the NNPC maintains a positive relationship with the Dangote Refinery and refuted rumors of any conflict, saying, “We are part of the owners of the Dangote Refinery and we don’t want it to collapse. We invested billions of naira into the Dangote Refinery. As of today, we have a 7.2 per cent stake in the refinery. So, why would we want to sabotage such a company?”
Dangote Refinery Calls for Enforcement of Domestic Crude Supply
Meanwhile, the management of the Dangote Petroleum Refinery has called on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce the domestic crude supply obligation as stipulated in the Petroleum Industry Act (PIA). This follows the refinery’s struggles to secure adequate crude oil from domestic producers, which it argues should be sold directly to refineries rather than through international middlemen.
Anthony Chiejina, spokesperson for the Dangote Group, expressed frustration over the situation, stating, “For September, our requirement is 15 cargoes, of which NNPC allocated six. Despite appealing to NUPRC, we’ve been unable to secure the remaining cargoes. When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed.”
Chiejina highlighted the financial impact of this issue, noting that the refinery has had to purchase Nigerian crude from international traders at an additional $3-$4 premium per barrel, adding up to $3-$4 million per cargo. He urged the NUPRC to fully enforce the PIA, ensuring that local refineries receive their required crude directly from domestic producers.
NUPRC’s Commitment to Sustainable Crude Supply
In response, the NUPRC reaffirmed its commitment to ensuring a sustainable supply of crude oil to Nigerian refineries under a market-determined pricing system. The Commission, in collaboration with the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce Industry (LCCI), is working to establish a framework that will support local refineries without subjecting them to exorbitant prices. The NUPRC assured that the federal government is committed to meeting the crude supply needs of domestic refineries to prevent any disruptions in operations.
