NNPC Moves to Increase Crude Oil Supply to Dangote Refinery
The Nigerian National Petroleum Corporation Limited is set to increase crude oil supply to the Dangote Petroleum Refinery to seven cargoes in May 2026, according to reports from Reuters. This represents an increase from the five cargoes delivered in recent months, as part of broader efforts to prioritize domestic crude supply and support local refining capacity in Nigeria.
Supply Increase Still Falls Short of Refinery Needs
Despite the planned adjustment, industry stakeholders have expressed concerns that the volume remains insufficient for the refinery's operational requirements. The National President of the Oil and Gas Services Providers Association of Nigeria, Colman Obasi, emphasized in an interview with Vanguard that seven cargoes would not adequately meet the refinery's demand.
"The facility, with a capacity of 650,000 barrels per day, requires significantly more crude supply to operate optimally," Obasi stated. He noted that prioritizing domestic crude allocation has become more urgent amid disruptions in global oil markets linked to tensions in the Middle East.
Experts Advocate for Greater Domestic Allocation
Another industry expert, speaking anonymously, echoed calls for increased crude allocation for local refining. The expert argued that Nigeria, as a major oil producer, should dedicate more cargoes to domestic use to reduce reliance on imports and conserve foreign exchange reserves.
David Bird, Chief Executive Officer of the Dangote refinery, disclosed during an interview on ARISE News that the plant is expected to receive between 13 and 15 crude cargoes monthly under the crude-for-naira arrangement. However, he revealed that the refinery is currently receiving only five cargoes, describing the situation as below the agreed supply level.
"Under the agreement, we should be getting about 13 to 15 cargoes a month... Currently, we're only getting five," Bird said.
Revenue Losses and Economic Implications
Bird further explained that the gap between crude purchase prices and prevailing premiums is resulting in revenue losses for Nigeria, as gains are captured by international traders. He clarified that the crude-for-naira policy is intended to strengthen foreign exchange stability rather than benefit the refinery alone, noting that processing domestic crude in local currency would enhance economic resilience.
Despite the supply shortfall, Bird confirmed that the refinery continues to operate at full capacity, supplying both domestic and regional fuel markets. This development highlights ongoing challenges in aligning crude supply with Nigeria's refining ambitions, as stakeholders push for policies that prioritize local production and reduce dependence on fuel imports.
Refinery's Export Threat and Market Implications
In related developments, the Dangote Refinery has reportedly threatened to fully supply the international market and deny Nigerians fuel if Nigerian authorities continue to grant import licenses to importers. Sources within the mega refinery disclosed that management is considering exporting all petroleum products in response to the continued issuance of petrol import licenses, despite official claims to the contrary.
Industry experts warn that full exports could lead to fuel shortages and renewed price hikes in Nigeria's downstream petroleum market, potentially undermining efforts to stabilize domestic fuel supply and pricing.
The situation underscores the complex dynamics between domestic refining capacity, crude oil allocation policies, and Nigeria's broader energy security objectives as the country seeks to reduce its dependence on imported petroleum products.
