The Dangote Petroleum Refinery plans to increase crude oil imports as the Nigerian National Petroleum Company Limited (NNPC) struggles to meet the fuel production requirements of the $20 billion Lekki-based facility.
According to refinery officials, production has reached approximately 500,000 barrels per day (bpd), with a goal of scaling up to 650,000 bpd by June 2025.
While the naira-for-crude deal, directed by President Bola Tinubu last year, remains in effect, sources at the refinery, speaking anonymously due to a lack of authorization to Punch, disclosed that additional crude imports are necessary to achieve this target.
Dangote Refinery
The NNPC is reportedly supplying only 350,000 bpd out of the 450,000 bpd allocated for domestic consumption, insufficient for the refinery’s 650,000 bpd capacity.
Officials noted that although the NNPC supplies crude, it cannot meet the refinery’s daily requirements, necessitating imports. Asked whether more crude would be imported despite the reactivation of NNPC’s refineries, one source replied, “Of course! This is a 650,000 bpd refinery. We are ramping up production and should reach full capacity by midyear. Do you know what 650,000 bpd means?”
Another official emphasized that the issue is not about NNPC’s capability but the sheer scale of operations. “We are not a 200,000 bpd refinery; this is 650,000 bpd. Currently, we produce 500,000 bpd, and by midyear, we’ll hit 650,000. To maintain operations, sourcing crude oil from outside Nigeria is a normal process,” the official explained.
A consultant to the refinery highlighted its global significance, stating, “This is a game for the ‘big boys.’ How many 650,000 bpd refineries exist in the world, let alone in Europe? Even OPEC has noted the impact of this refinery on Europe’s PMS market.” The consultant also praised the quality of fuel produced, which meets Euro 5 standards, resulting in higher performance.
Naira-for-Crude Initiative
As Nigeria’s refining capacity grows, the 450,000 barrels of crude oil designated for domestic refineries are proving inadequate. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicates that the Dangote refinery, Port Harcourt refinery, and six others collectively require 770,500 bpd to meet production demands.
According to the NUPRC, Nigeria’s total refining capacity is 974,500 bpd, considering only operational refineries. In July 2024, President Bola Tinubu directed the NNPC to sell crude oil to local refineries in naira, starting with Dangote refinery as a pilot program. However, with the Port Harcourt and Warri refineries resuming operations, more refineries will soon participate in the naira-for-crude arrangement.
The NUPRC projects that eight refineries will require 123.5 million barrels of crude in the first half of 2025. This includes:
Dangote refinery: 550,000 bpd
Port Harcourt refinery: 60,000 bpd
Warri refinery: 75,000 bpd
Kaduna refinery: 66,000 bpd
Opac refinery: 5,000 bpd
Waltersmith refinery: 4,500 bpd
Duport refinery: 2,000 bpd
Edo refinery: 1,000 bpd
The Federal Government plans to review the naira-for-crude program in April 2025 to assess its effectiveness.
In response to unreliable local supplies, the Dangote refinery is constructing eight additional crude tanks, increasing storage capacity by 41.67% to 3.4 billion liters. Devakumar Edwin, Vice President of Oil and Gas Business at Dangote Industries, stated, “Importing crude from other countries instead of relying solely on local sources requires higher stockpiles. We’ve started building eight more tanks, and four are nearing completion.”
Although the NNPC is expected to supply 385,000 bpd to Dangote refinery under the naira-for-crude initiative, it remains unclear whether this target is being met. Industry experts suggest that as Nigeria increases crude production, local refineries may continue to depend on imports to meet their needs.
