ABUJA, Nigeria (VOICE OF NAIJA)-The Nigerian National Petroleum Company Limited has increased crude oil supply to the Dangote Petroleum Refinery and Petrochemicals, allocating seven cargoes for May loading in a move aimed at strengthening domestic fuel production.
Two trader sources told Reuters on Tuesday that the new allocation represents an increase from the five cargoes the refinery had been receiving in recent months.
The refinery is, however, expected to continue receiving five cargoes in April.
The development comes amid growing pressure on fuel supply and rising petrol prices across Nigeria, as the refinery continues to face challenges in securing adequate local crude.
The report read, “The Nigerian National Petroleum Company is allocating seven crude cargoes for May loading to Nigeria’s Dangote refinery, up from the five it received in previous months, two trade sources told Reuters.
“Fuel prices in Nigeria have reached record highs, and Dangote has previously said the company could source only about five crude cargoes a month locally, far short of the 13–15 it requires, forcing it to import the rest at prices dictated by the impact of war in the Middle East.”
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Officials from both NNPC and the refinery had not responded to requests for comment as of the time of filing this report.
The move aligns with earlier reports that the Federal Government, through NNPC, has been working to boost crude supply to the Dangote refinery under ongoing arrangements designed to strengthen local refining capacity.
Multiple industry sources and officials from both organisations disclosed in early March that NNPC is utilising its global crude trading network to secure third-party supplies for the refinery at competitive international prices.
“Leveraging our global crude trading network, we are sourcing third-party crude for the refinery at prices that are competitive with prevailing international market rates,” a senior NNPC official, who spoke anonymously due to lack of authorisation, said.
The official added, “As the national oil company entrusted with safeguarding Nigeria’s energy security, NNPC Limited
remains fully committed to supporting domestic refining, including the Dangote Petroleum Refinery. Within the framework of our existing agreements, we continue to facilitate crude supply to DRP in the face of temporary availability constraints.”
Despite the increase, the 650,000-barrels-per-day refinery continues to face a major supply gap.
It requires between 13 and 15 cargoes monthly to operate at full capacity but still receives significantly less from domestic sources.
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As a result, the refinery has relied on imported crude, exposing it to fluctuating global prices driven by geopolitical tensions, particularly conflicts in the Middle East.
It had earlier warned that limited domestic supply was affecting operations and increasing costs.
Fuel prices in Nigeria have surged to record levels in recent months due to supply constraints and high import costs.
Although the Dangote refinery has increased petrol supply to the domestic market, it currently meets just over two-thirds of the country’s estimated daily demand of 60 million litres.
In response to rising costs, the refinery recently raised petrol depot prices by about 13 per cent, adding further pressure to the downstream sector.
NNPC’s decision to increase crude allocation to the refinery may also impact Nigeria’s crude export volumes.
With global supply already tight due to disruptions linked to tensions in the Middle East, diverting more crude to domestic refining could reduce export volumes.
This may compel international buyers to turn to alternative suppliers, potentially affecting Nigeria’s standing in the global crude market.
The refinery, which began operations in 2024, is expected to significantly cut Nigeria’s dependence on imported petroleum products.
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However, challenges related to crude supply, pricing, and logistics continue to influence its operations.
Industry observers note that increasing domestic crude allocation remains essential for achieving energy security, stabilising fuel prices, and easing pressure on foreign exchange.
They add that sustained supply at required levels will be crucial to unlocking the refinery’s full capacity and delivering long-term economic benefits.