The Federal Government, through the Nigerian National Petroleum Company Limited (NNPC), is considering sourcing crude oil from international traders to supply the Dangote Petroleum Refinery as Nigeria grapples with rising fuel prices and unstable crude supply.
Punch Newspapers The move follows persistent challenges in securing adequate domestic crude oil for the refinery, which has forced it to rely partly on imported crude despite Nigeria being Africa’s largest oil producer.
Industry sources say the government is leveraging NNPC’s global trading network to secure crude cargoes from foreign suppliers to sustain refinery operations and maintain fuel supply in the country.
Why foreign crude may be suppliedThe Dangote refinery requires about 13 crude cargoes per month to operate optimally, but it currently receives far fewer shipments from local producers through NNPC.
This shortfall has created pressure on the refinery’s production capacity and fuel output. AfricaDue to the shortage of local crude allocations, the refinery has increasingly turned to international markets.
Data from shipping analytics firms shows that Nigeria’s imports of foreign crude particularly from the United States have surged significantly, with millions of barrels shipped to support refining operations in recent months.
Energy analysts note that while the refinery was expected to rely largely on Nigerian crude, supply constraints, contractual issues with producers, and export commitments by upstream oil companies have limited domestic deliveries.
Impact on fuel pricesThe supply challenge is occurring at a time when petrol prices in Nigeria have already surged above ₦1,000 per litre in several states, driven by global crude oil volatility and rising refining costs.
Recently, the Dangote refinery increased its petrol ex-depot price to about ₦995 per litre, citing higher crude costs and disruptions in the global oil market linked to geopolitical tensions in the Middle East.
Industry experts warn that the continued reliance on imported crude means local petrol prices will remain sensitive to international oil market fluctuations, weakening expectations that domestic refining alone would shield Nigerians from global price shocks.
Possible implicationsStakeholders say supplying foreign crude through NNPC could help stabilize production at the refinery and prevent fuel shortages in the domestic market. However, analysts caution that importing crude adds additional costs estimated at $5–$7 per barrel which may ultimately be reflected in pump prices paid by consumers.
Experts also argue that enforcing domestic crude supply obligations to local refineries would be a more sustainable long-term solution for stabilising fuel prices and improving Nigeria’s energy security.
The Dangote refinery, located in the Lekki Free Trade Zone in Lagos, has a capacity of about 650,000 barrels per day and is expected to play a central role in reducing Nigeria’s dependence on imported petroleum products once supply challenges are resolved.
Source: Punch.ng
