Nigeria’s state oil firm, Nigerian National Petroleum Company Limited, has doubled crude oil supply to Dangote Petroleum Refinery to 10 cargoes in March, raising expectations of improved fuel availability and possible price moderation.
Operators in the downstream oil sector say the increased crude deliveries could ease fuel supply constraints, though they caution that price relief will depend on government intervention in crude pricing.
The development was confirmed by Aliko Dangote, President of the Dangote Group, who disclosed that the refinery received 10 cargoes of crude oil from NNPC in March—double the average of about five cargoes recorded monthly since late 2024.
“Nigeria doubled crude supply to Dangote Refinery in March… Last month, they gave us six cargoes with payments in naira and four cargoes with payments in dollars,” Mr Dangote said.
Supply boost amid global tensions
The increase comes as Nigeria moves to stabilise domestic fuel supply following disruptions in global oil markets triggered by geopolitical tensions in the Middle East, particularly after the US-Israel strikes on Iran February 2026.
Industry analysts say the move reflects a strategic shift toward prioritising local refining capacity and reducing dependence on volatile international supply chains.
Reports had earlier indicated that NNPC also planned to increase crude allocation for future months, although refinery officials noted inconsistencies in supply projections.
Capacity constraints
Despite the improved supply, Mr Dangote said the refinery is still operating below optimal capacity, requiring about 19 cargoes of crude monthly to function fully.
“The supply has improved, but it is not yet at the level we need. We still have to import crude from the United States and other African countries,” he said.
He added that limited access to locally produced crude—especially from international oil companies—continues to drive up operational costs.
“Some of the oil firms prefer to sell to international traders. So, we end up buying our own crude at a premium,” Mr Dangote explained.
Regional supply role
The refinery’s growing importance in Africa’s energy market was also highlighted, with Mr Dangote revealing that about 17 cargoes of petroleum products were exported to other African countries in March.
He noted that many countries now depend on the refinery amid global supply disruptions, reinforcing its position as a key regional supplier.
Beyond fuels, the facility is also expanding production of polypropylene, a critical industrial material currently facing global shortages.
Industry concerns
Commenting on the development, Jeremiah Olatide said the increase in crude supply is a positive step but may not immediately translate to lower fuel prices.
“The 10 crude cargoes supplied… indicates more fuel availability. But without Federal Government intervention… Nigerians will continue to experience availability but unaffordability,” Mr Olatide said.
He warned that petrol and diesel prices could rise to ₦1,500 and ₦2,000 per litre respectively if cost pressures persist.
Mr Olatide further explained that even naira-denominated crude supplies are still priced using international benchmarks, limiting the chances of immediate price reductions.
“As I speak, diesel prices at the depot have crossed ₦2,000 per litre, so there is a crisis ahead,” he added.
Background
The crude-for-naira arrangement between NNPC and the Dangote refinery, introduced in October 2024, was designed to boost local refining, conserve foreign exchange, and stabilise fuel prices.
Nigeria has long relied on imported refined petroleum products due to limited domestic refining capacity, placing pressure on foreign reserves and exposing the country to global price shocks.
The 650,000 barrels-per-day Dangote refinery is expected to significantly reduce this dependence, though challenges such as inconsistent crude supply and pricing dynamics persist.
Discover more from VOICE OF THE PEOPLE
Subscribe to get the latest posts sent to your email.
46yaks