The Dangote Petroleum Refinery has disclosed that it is currently receiving significantly fewer crude oil cargoes than expected under the Federal Government’s crude-for-naira arrangement, raising fresh concerns about feedstock adequacy for Africa’s largest refinery.
The Chief Executive Officer of the refinery, David Bird, revealed that the facility is receiving just five crude cargoes monthly instead of the 15 cargoes initially envisaged under the policy framework.
The crude-for-naira initiative was introduced to allow local refineries to purchase crude oil in Nigeria’s local currency, with the aim of stabilising fuel prices and easing pressure on foreign exchange demand. However, Bird’s disclosure indicates a widening gap between expected and actual supply volumes.
According to him, the shortfall means the refinery must increasingly rely on alternative sources, including crude purchased at international market rates, to sustain operations.
He clarified that despite the arrangement, the refinery does not receive crude at discounted rates, noting that purchases are still made at prevailing global benchmark prices, exposing the plant to international oil market volatile.
The reduced allocation has implications for both operational efficiency and cost structure. Bird pointed out that global factors such as rising crude prices, freight charges, insurance, and financing costs continue to impact refinery operations.
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He highlighted a sharp increase in logistics costs, with tanker freight reportedly rising from about $800,000 to as high as $3.5 million per shipment in recent market conditions.
Despite these challenges, the refinery — which has a nameplate capacity of about 650,000 barrels per day — continues to operate at full capacity, positioning itself as a critical asset in Nigeria’s drive toward energy self-sufficiency.
The disclosure underscores ongoing tensions within Nigeria’s oil supply chain, where domestic refineries have repeatedly raised concerns about inconsistent crude allocations. The situation also reflects broader structural challenges, including pricing disputes and competition between local refining needs and export commitments.
Industry analysts note that resolving the supply gap will be crucial for the success of the crude-for-naira policy and for ensuring the refinery can consistently meet domestic fuel demand.
As engagements between the refinery and government stakeholders continue, the adequacy and reliability of crude supply remain central to the long-term viability of Nigeria’s refining ambitions.
