Nigerian National Petroleum Company Limited(NNPCL) has increased crude oil supply to the Dangote Petroleum Refinery and Petrochemicals, allocating seven cargoes for May loading in a bid to boost domestic fuel production.
Two trader sources confirmed the development on Tuesday, noting that the latest allocation represents an increase from the five cargoes the refinery had been receiving in recent months.
However, the refinery will continue to receive five cargoes in April before the higher allocation begins in May.
According to the sources, the decision comes amid growing concerns over fuel supply and rising petrol prices in Nigeria, as the refinery continues to struggle to secure sufficient crude locally.
“The Nigerian National Petroleum Company is allocating seven crude cargoes for May loading to Nigeria’s Dangote refinery, up from the five it received in previous months,” the sources said.
Despite the increase, the refinery still faces a significant crude supply gap. The 650,000-barrels-per-day facility requires between 13 and 15 cargoes of crude monthly to operate at optimal capacity.
Currently, it receives far fewer cargoes from domestic sources, forcing it to import additional crude oil from international markets.
Earlier reports had indicated that the Federal Government, through NNPC, was working to improve crude supply to the refinery as part of efforts to strengthen local refining capacity and enhance energy security.
Industry sources disclosed that the national oil company has been leveraging its global crude trading network to source third-party crude for the refinery at competitive international prices.
A senior NNPC official, who spoke on condition of anonymity, explained that the company remains committed to supporting domestic refining despite temporary supply constraints.
“As the national oil company entrusted with safeguarding Nigeria’s energy security, NNPC Limited remains fully committed to supporting domestic refining, including the Dangote Petroleum Refinery,” the official said.
“Within the framework of our existing agreements, we continue to facilitate crude supply to the refinery in the face of temporary availability constraints.”
The limited supply of domestic crude has forced the refinery to rely on imported oil, exposing it to volatile global prices influenced by geopolitical tensions, particularly conflicts in the Middle East.
The refinery had earlier warned that insufficient local crude supply was constraining its operations and increasing production costs.
Meanwhile, petrol prices in Nigeria have climbed to record levels in recent months due to supply challenges and high import costs.
Although the Dangote refinery has increased petrol supply to the domestic market, it is currently meeting just over two-thirds of the country’s estimated daily demand of about 60 million litres.
In response to rising costs, the refinery recently raised its petrol depot price by about 13 per cent, adding further pressure to the downstream petroleum sector.
Analysts say the decision by NNPC to increase crude allocation to the refinery could also affect Nigeria’s crude export volumes.
With global oil supply already tight due to disruptions linked to tensions in the Middle East, diverting more crude for domestic refining may reduce volumes available for export.
This could push international buyers to seek alternative sources and potentially influence Nigeria’s position in the global crude market.
The Dangote refinery, which began operations in 2024, is expected to play a major role in reducing Nigeria’s dependence on imported petroleum products.
However, challenges related to crude supply, pricing, and logistics continue to shape its operations.
Industry stakeholders say sustained crude supply at required volumes will be critical to unlocking the refinery’s full potential, stabilising fuel prices, and reducing pressure on the country’s foreign exchange reserves.
