Dangote Refinery Turns to US Crude Amid Local Supply Shortfalls

The Dangote Petroleum Refinery, Nigeria’s flagship $20bn energy project, is importing 12 million barrels of crude oil from the United States, highlighting a critical reliance on foreign feedstock due to insufficient domestic supply. The shipment, expected to arrive in February, underscores the hurdles facing the Lekki-based facility as it ramps up production toward its 650,000 barrels-per-day (bpd) capacity by mid-2025.

The refinery, which began operations last year, has scaled up output to 500,000bpd but remains constrained by limited local crude allocations from the Nigerian National Petroleum Company Limited (NNPC). Despite President Bola Tinubu’s directive for a naira-for-crude arrangement, the NNPC has struggled to meet the refinery’s daily requirement of 550,000bpd, sourcing just 350,000bpd from the 450,000bpd earmarked for local consumption.

“About 12 million barrels of crude have departed the US and should arrive in Nigeria by February,” an insider revealed to The Africa Report. This importation aligns with the refinery’s strategy to secure feedstock from alternative sources to sustain production and meet its ambitious targets.

The move also reflects broader supply issues within Nigeria’s oil sector. Officials at Dangote Industries have indicated that the state-owned NNPC’s inability to provide sufficient crude has necessitated a pivot to international markets. “Currently, we are at 500,000bpd; we will ramp to 650,000 by midyear. You know what it means? So, it is a normal process to source crude oil anywhere it is available,” a refinery official explained.

To address the growing dependence on imports, the refinery is constructing eight additional storage tanks, boosting capacity by 41.67% to accommodate 3.4 billion litres of crude. The expanded storage is intended to stabilise operations amid unpredictable local supply.

The refinery has also turned to long-term agreements, including a tender issued last May to purchase two million barrels of West Texas Intermediate (WTI) Midland crude monthly over 12 months, amounting to 24 million barrels of US crude imports.

The development raises questions about Nigeria’s ability to meet its own refining needs. With the Port Harcourt and Warri refineries poised to resume operations, the government’s naira-for-crude programme is expected to extend to additional facilities. However, for now, the Dangote refinery remains heavily reliant on international sources to maintain its output of petrol, diesel, and aviation fuel, which are supplied to both domestic and regional markets.

Devakumar Edwin, Vice President for Oil and Gas at Dangote Industries, recently highlighted the refinery’s challenges, citing “low crude supply from the NNPC” as a key driver behind its growing import dependence. Edwin noted that importing crude means higher stockpiles are required to maintain operational consistency.

As Nigeria’s largest refinery continues to navigate these complexities, its reliance on foreign crude underscores the broader structural challenges within the country’s oil sector—a stark reality for a nation with some of the world’s largest proven reserves.