NNPC Doubles Crude Supply to Dangote Refinery, But Petrol Prices May Stay High

NNPC Doubles Crude Supply to Dangote Refinery, But Petrol Prices May Stay High

Nigeria’s downstream oil sector is witnessing renewed optimism as the Nigerian National Petroleum Company Limited significantly increased crude oil deliveries to the Dangote Petroleum Refinery, raising expectations of improved fuel availability and potential price relief.

Operators say the development could mark a turning point for Nigeria’s energy market, but caution that lower petrol prices will depend largely on government intervention in crude pricing.

The President of the Dangote Group, Aliko Dangote, confirmed that the refinery received 10 crude cargoes in March 2026, double the average of about five cargoes monthly since late 2024. The shipments included six cargoes paid for in naira and four in US dollars, under the ongoing crude-for-naira arrangement designed to reduce foreign exchange pressure and boost local refining.

The increase comes at a critical time when global oil supply chains have been disrupted by geopolitical tensions in the Middle East, prompting Nigeria to strengthen domestic refining capacity. Industry stakeholders say this strategic shift is aimed at reducing reliance on imported fuel and insulating the economy from external shocks.

Despite the improvement, the refinery is still operating below full capacity. Dangote disclosed that the plant requires about 18 to 19 cargoes monthly to run optimally, meaning Nigeria still falls short of meeting its full domestic fuel demand through local production alone. As a result, the refinery continues to import crude from the United States and other African producers, increasing operational costs.

Dangote also raised concerns about the role of international oil companies operating in Nigeria, noting that many prefer to sell crude to foreign traders rather than supply directly to local refineries. This forces the Dangote refinery to repurchase Nigerian crude at higher international prices, adding pressure to the final cost of petroleum products.

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Experts say this pricing challenge is central to whether Nigerians will feel any relief at the pump. The Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, noted that while increased supply improves fuel availability, it does not automatically translate to affordability. According to him, crude supplied locally is still priced using global benchmarks, limiting the chances of an immediate drop in petrol and diesel prices.

He warned that without government intervention—such as a crude subsidy for local refineries—fuel prices could continue to rise, with petrol potentially nearing ₦1,500 per litre and diesel exceeding ₦2,000 per litre. He added that diesel prices at the depot level have already crossed critical thresholds, signaling mounting pressure in the downstream market.

Beyond Nigeria, the Dangote refinery is rapidly emerging as a major energy supplier across Africa. Dangote revealed that the facility exported about 17 cargoes of refined petroleum products to other African countries in March alone, highlighting its growing regional influence amid global supply uncertainties.

The refinery is also expanding into petrochemicals, particularly polypropylene production, which is currently in high demand globally due to supply shortages linked to Middle East disruptions. This diversification is expected to further strengthen Nigeria’s industrial base and reduce dependence on imports.

The 650,000 barrels-per-day refinery, the largest in Africa, remains central to Nigeria’s long-term plan to achieve energy security, conserve foreign exchange, and stabilise the downstream sector. However, analysts stress that sustained crude supply, improved cooperation with oil producers, and favourable pricing policies will be critical to unlocking its full potential.

For now, while the increased crude allocation signals progress, Nigerians may experience improved fuel supply before any meaningful reduction in pump prices becomes a reality.

NNPC Doubles Crude Supply to Dangote Refinery, But Petrol Prices May Stay High