Kachikwu: Nigeria Has Forward Sold Most Of Its Crude, Doesn’t Have Enough To Meet Quota For Domestic Refineries

Dumebi Kachikwu has highlighted the challenges facing Nigerian refineries, including Dangote’s, due to the government forward-selling crude oil.   

 Presidential candidate of the African Democratic Congress (ADC) in the 2023 general elections, Dumebi Kachikwu, has said that the Nigerian government has forward sold most of its oil, which has caused the quota of crude oil needed to be allocated to domestic refineries to not be as much as it should be.

Kachikwu said this in an interview with ARISE NEWS on Tuesday while discussing the controversy between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Dangote Refinery, where the management of Dangote had come out to say that the NUPRC had not allocated the 29 million barrels of oil promised to the refinery.

The former Presidential candidate, explaining the problem between the NUPRC and Dangote refinery, which he described as a non-issue, said, “We have several refineries in Nigeria, Dangote’s refinery now happens to be the largest, but outside of Dangote refinery, you have the government owned refineries and you have smaller refineries like Walter Smith and what have you. What NUPRC has said is that they’ve given several allocations to these people. But we forget one thing, the last administration entered into a lot of loan agreements, and entering those loan agreements, they forward sold our oil, or they used our oil that we are producing right now as a guarantee.

“What this essentially means is that the quantum of oil most people expect that Nigeria has to meet her domestic requirements for our domestic refineries is not as should be. So, we don’t want to speak to that, we don’t want to understand that we are actually in a mess where that is concerned, and we want to speak to issues that, as far as I’m concerned, are really non-issues. Dangote’s refinery can get oil from any part of the world as long as he has money to pay for the oil- the same as Walter Smith, the same as any other refinery in Nigeria.

He went on to explain, “And again we know- every year, NNPC gives out contracts to several marketers of refineries from all over the world promising them crude, and they pay upfront for that crude. So, where they are expected to get crude oil out of season beats me. But they- what I understand is happening is that they’ve gone outside of this to say we have some crude oil, and we’re given this to Dangote, to Port-Harcourt refinery that I understand is coming on stream, they’re testing right now, to Warri, to Walter Smith, and to the other refineries. So, I don’t think there’s anybody out to sabotage Dangote refinery.”

Kachikwu then said, “Nigerians need to be better informed and have a better understanding of the whole situation. When you speak about the PIA and that local refineries must have access to Nigeria’s portion of the crude oil, the PIA was not detailed or specific as the say this is the quantum of crude oil that must be allocated to any one refinery, or did not say that any local refinery could have all the crude oil they require from Nigeria’s portion of the crude oil.

“So, it was silent on that, and if you understand how the oil business works and refining, you know that there is no refinery in the world that depends solely on crude oil or domestically produced crude oil. You will also be surprised to know that all over the world, there are nations that don’t have oil but have refineries.”