The Dangote Petroleum Refinery is set to receive 12 million barrels of crude oil from the United States to mitigate local supply constraints that have hindered its production capacity.
The $20 billion facility, which aims to reach its full refining capacity of 650,000 barrels per day (bpd) by June 2025, has turned to international markets to sustain operations.
According to The Africa Report, the shipment has already departed from the U.S. and is expected to arrive in Nigeria by February.
Local crude supply constraints
Despite an agreement for the Nigerian National Petroleum Company Limited (NNPC) to supply 450,000 bpd for domestic refining, Dangote Refinery has reportedly struggled to receive adequate crude. NNPC is currently supplying only 350,000 bpd, making it difficult for the refinery to meet its production targets.
Currently, the refinery has ramped up production to 500,000 bpd, but officials say additional feedstock is needed, necessitating crude imports.
To address supply volatility, Dangote Refinery is expanding its crude storage capacity by constructing eight additional tanks, increasing total capacity by 41.67% to 3.4 billion liters.
Growing reliance on imported crude
The refinery has been diversifying its crude sources to ensure uninterrupted operations. In May 2024, it issued a term tender to purchase 2 million barrels of West Texas Intermediate (WTI) Midland crude monthly for 12 months, totaling 24 million barrels annually.
Dangote Industries’ Vice President for Oil and Gas, Devakumar Edwin, acknowledged this shift, stating:
“Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher.”
Government policy and future outlook
In July 2024, President Bola Tinubu directed the NNPC to sell crude to local refineries in naira to ease forex pressure. However, current projections indicate that Dangote Refinery alone will require 99.55 million barrels between January and June 2025.
As Nigeria’s largest refining project, Dangote Refinery’s ability to secure stable crude supply—whether locally or internationally—will be critical to reducing the country’s reliance on imported petroleum products and stabilizing fuel prices.
