The Nigerian National Petroleum Company Limited (NNPC) has increased crude oil supply to the Dangote Petroleum Refinery and Petrochemicals, allocating seven cargoes for May loading in a move aimed at boosting domestic fuel production.
Two trader sources told Reuters on Tuesday that the latest allocation marks an increase from the five cargoes the refinery had been receiving in previous months. However, this means the refinery will continue to receive five cargoes in April.
The development comes amid mounting pressure on fuel supply and rising petrol prices across Nigeria, as the refinery struggles to secure sufficient crude locally.
The report read, “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, two trade sources told Reuters.
“Fuel prices in Nigeria have reached record highs, and Dangote has previously said the company could source only about five crude cargoes a month locally, far short of the 13–15 it requires, forcing it to import the rest at prices dictated by the impact of war in the Middle East.”
Officials of the national oil company and the refinery did not respond to requests for comments as of the time of filing this report.
The development aligns with earlier reports by The PUNCH that the Federal Government, through the NNPC, was working to increase crude supply to the Dangote refinery under ongoing arrangements aimed at strengthening local refining capacity.
Multiple industry sources and officials from both NNPC and the Dangote refinery told our correspondent exclusively in early March that the national oil company is leveraging its global crude trading network to source third-party supply for the Dangote refinery at competitive international market rates.
“Leveraging our global crude trading network, we are sourcing third-party crude for the refinery at prices that are competitive with prevailing international market rates,” a senior official at NNPC, who spoke in confidence due to a lack of authorisation to speak on the matter, said.
The official further explained, “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. Within the framework of our existing agreements, we continue to facilitate crude supply to DRP in the face of temporary availability constraints.”
Despite the increase, the 650,000-barrels-per-day refinery still faces a significant shortfall in crude supply. The facility requires between 13 and 15 cargoes monthly to operate at optimal capacity, but has continued to receive far less from domestic sources.
This has forced the refinery to rely on imported crude, exposing it to volatile global prices driven by geopolitical tensions, particularly conflicts in the Middle East. The refinery had earlier warned that limited domestic supply was constraining its operations and increasing costs.
Nigeria’s fuel prices have climbed to record levels in recent months, driven by supply constraints and high import costs. Although the Dangote refinery has ramped up petrol supply to the domestic market, it is currently meeting just over two-thirds of the country’s estimated daily demand of 60 million litres.
In response to rising costs, the refinery recently increased petrol depot prices by about 13 per cent, further adding to price pressures in the downstream sector.
The decision by NNPC to increase crude allocations to the refinery could have implications for Nigeria’s crude export volumes. With global supply already tight due to disruptions linked to tensions in the Middle East, any diversion of crude to domestic refining may reduce volumes available for export.
This could force international buyers to seek alternative sources, potentially affecting Nigeria’s position in the global crude market.
The refinery, which commenced operations in 2024, is expected to significantly reduce Nigeria’s dependence on imported petroleum products.
However, challenges around crude supply, pricing, and logistics have continued to shape its operations. Increasing domestic crude allocation remains critical to achieving energy security, stabilising fuel prices, and reducing pressure on foreign exchange.
They, however, note that sustained supply at required volumes will be key to unlocking the refinery’s full potential and delivering long-term benefits to the Nigerian economy.
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