Operators in Nigeria’s downstream oil sector have projected possible price relief following increased crude oil deliveries to the Dangote Petroleum Refinery by the Nigerian National Petroleum Company Limited.
Industry stakeholders said the development could improve fuel availability in the country, though a reduction in pump prices would depend largely on government intervention in crude pricing.
The refinery confirmed that crude oil deliveries from NNPC doubled in March, boosting prospects for enhanced domestic fuel production amid global supply disruptions.
President of the Dangote Group, Aliko Dangote, disclosed in a report that the Lekki-based refinery received 10 cargoes of crude oil from the state-owned oil firm in March, compared to an average of about five cargoes monthly since late 2024.
According to Dangote, the deliveries included six cargoes paid for in naira and four in dollars under the crude supply arrangement between the refinery and NNPC.
“Nigeria doubled crude supply to Dangote Refinery in March as Africa’s top oil producer moved to shore up fuel availability after the Iran war disrupted Middle East shipments. Last month, they gave us six cargoes with payments in naira and four cargoes with payments in dollars,” he said.
The increase in crude allocation comes as Nigeria seeks to strengthen domestic fuel production following disruptions in global oil supply chains linked to geopolitical tensions in the Middle East.
Industry operators said prioritising domestic refining capacity could reduce reliance on imported petroleum products and help stabilise fuel supply if the policy is sustained.
However, Dangote noted that the refinery is still operating below optimal capacity and requires about 19 cargoes of crude monthly to function at full capacity.
“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 to meet our requirements,” he explained.
The 650,000-barrels-per-day refinery, widely regarded as the largest in Africa, has increasingly relied on imported crude to bridge supply gaps, raising concerns about rising operational costs.
Dangote also revealed that some international oil companies operating in Nigeria prefer selling crude to international traders rather than supplying directly to the refinery.
“Some of the international oil companies would rather sell to traders. So, we end up buying our own crude at a premium. The higher we pay, the higher the cost of petroleum products will be, because we have to pass on the cost,” he added.
Despite these challenges, the refinery’s influence on regional energy supply continues to grow. Dangote disclosed that the plant exported about 17 cargoes of petroleum products to other African countries in March alone.
He added that the facility is also ramping up production of polypropylene, a key industrial material used in plastics manufacturing and automotive components, which is currently experiencing high global demand.
The crude-for-naira arrangement between NNPC and the Dangote refinery, introduced in October 2024, was designed to support local refining, conserve foreign exchange, and stabilise fuel prices.
Commenting on the development, the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said the increase to 10 crude cargoes in March was a positive sign for domestic refining.
However, he warned that Nigerians might not immediately benefit from lower fuel prices without direct government intervention.
“The 10 crude cargoes supply recorded in March is a good development because it indicates more crude supply and, by extension, more fuel availability. But without Federal Government intervention through crude subsidy to the Dangote refinery and other local refineries, Nigerians will continue to experience availability but unaffordability,” he said.
Olatide added that locally supplied crude is still priced according to international benchmarks, limiting the possibility of immediate pump price reductions.
He also warned of growing pressure in the downstream market, noting that diesel prices at depots had already crossed N2,000 per litre, signalling potential challenges ahead for consumers and businesses.
While increased crude supply to the Dangote refinery marks progress in Nigeria’s drive for energy security, industry experts say sustained supply and improved collaboration among stakeholders will be crucial to achieving long-term stability in the fuel market.
