Dangote Refinery Issues Warning Over Crude Oil Supply Constraints
The Dangote Petroleum Refinery has reaffirmed its commitment to supplying fuel to the Nigerian market but issued a stark warning that continued reliance on imported crude oil could force the facility to export refined products instead of distributing them locally. Company officials emphasized that adequate access to domestic crude is critical for sustaining fuel availability across the nation.
Strong Demand for Refined Products Amid Supply Challenges
President of the Dangote Group, Aliko Dangote, revealed in an interview with Al Jazeera that the refinery is experiencing robust demand for its refined products. The facility is reportedly nearly out of aviation fuel and diesel, while petrol remains in surplus. A senior company official, speaking anonymously, assured that Nigeria would not face fuel shortages as long as crude supply is maintained.
"We will not starve Nigeria, as long as they keep giving us crude," the official told PUNCH newspaper. The refinery had previously complained of receiving less than five million barrels of crude monthly, far below its requirement of 19.7 million barrels. Importing crude would make it economically necessary to export refined products rather than selling them domestically.
Ongoing Discussions with Oil Producers
The official confirmed that discussions are ongoing with the Nigerian National Petroleum Company Limited and other oil producers regarding supply concerns. The refinery's Chief Executive Officer, David Bird, noted during an interview on Arise News that the company is increasingly forced to purchase Nigerian crude from international markets at higher prices.
Bird explained that the refinery currently receives only five cargoes monthly under the Federal Government's naira-for-crude arrangement, instead of the expected 13 to 15 cargoes. This shortfall has significant implications for local fuel distribution and pricing.
Global Demand and Export Activities
Global supply disruptions linked to tensions in the Middle East have increased demand for fuel from the 650,000-barrels-per-day refinery located in Lekki, Lagos. The facility currently produces approximately 75 million litres of petrol, 25 million litres of diesel, and 20 million litres of aviation fuel daily.
It recently exported 12 cargoes of fuel, totaling 456,000 tonnes, to countries including Côte d'Ivoire, Cameroon, Ghana, Tanzania, and Togo. According to reports by Al Jazeera, buyers from Europe, Asia, and South America are also seeking supplies from the refinery, highlighting its growing international presence.
Sharp Increase in Diesel Prices Nationwide
Separately, Nigeria has recorded one of the sharpest increases in diesel prices globally, according to data from InvestorSight. The report shows that diesel prices in Nigeria have risen by 78.3 percent since the outbreak of tensions linked to Iran, ranking second globally behind the Philippines.
This increase surpasses those recorded in countries such as the United States, Germany, and the United Kingdom. Diesel prices in Nigeria have climbed from about N900 per litre to N1,600, driven by the ongoing crisis which began on February 28.
Economic Impact and Business Concerns
The surge in diesel prices highlights Nigeria's vulnerability to global fuel shocks despite being an oil-producing nation. Diesel remains a key energy source for industries, transport operators, and small businesses that rely on generators due to inconsistent electricity supply.
Analysts say rising diesel costs are likely to increase production and logistics expenses, potentially driving inflation as businesses pass on costs to consumers. Some marketers noted that fuel prices could have risen even higher—up to N3,000 per litre—without the contribution of the Dangote refinery.
Calls for Government Intervention
Petrol marketers have urged the government to introduce temporary measures to ease the hardship caused by rising fuel prices. The marketers, under the aegis of the Petroleum Products Retail Outlets Owners Association of Nigeria, said higher fuel costs are increasing transport fares and the cost of goods.
The group also called for food subsidies and the adoption of alternative energy sources like Compressed Natural Gas. These measures aim to mitigate the economic strain on Nigerian consumers and businesses amid ongoing fuel supply challenges.
