Dangote Refinery Nears Full Production Amid Uncertainty Over Crude Supply
The Dangote Petroleum Refinery has raised its daily production to 85 per cent of its 650,000 barrels-per-day capacity, with plans to reach full capacity within the next 30 days. However, questions remain over where it will source its crude, as domestic supply from Nigeria remains inconsistent.
The refinery, which began processing crude into diesel, naphtha, and jet fuel in early 2024, is now operating at approximately 552,500 barrels per day. Vice President of Dangote Industries, Devakumar Edwin, told Reuters that the facility was on track to reach full production by March.
“We are currently running at 85 per cent capacity. We can go 100 per cent in 30 days,” Edwin said.
This projection appears more ambitious than earlier estimates from Dangote Group officials, who had indicated that full capacity might not be reached until June 2025. The accelerated timeline underscores the refinery’s strategic push to end fuel importation into Nigeria and across Africa.
A Refinery Without Reliable Crude?
Despite its rising output, the refinery’s crude supply remains a major question. The plant has faced persistent challenges in securing sufficient feedstock locally, forcing it to turn to international imports.
Last year, Dangote Refinery signed an agreement with the Nigerian government to purchase crude in local currency, yet it struggled to receive adequate volumes. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has stated that the refinery will require up to 550,000 barrels per day of crude from Nigerian producers between January and June this year.
To ensure refineries receive their domestic crude allocations, the regulator has threatened to block export permits for oil producers who fail to meet local supply obligations. However, it remains unclear whether this move has secured a steady flow of crude for Dangote.
Competing with Europe, Expanding to the Middle East
Despite its supply struggles, the refinery has already begun reshaping global fuel markets. By ramping up production, it is increasingly competing with European refiners, disrupting long-standing supply chains.
Aliko Dangote, the refinery’s chairman, recently revealed that the company had dispatched two cargoes of jet fuel to Saudi Aramco—signalling an expansion beyond Africa.
“We are looking at all the markets right now,” Edwin confirmed.
What Next for Fuel Prices?
With output set to increase, there are growing expectations about its impact on domestic fuel prices. A senior refinery official, speaking anonymously, acknowledged that the surge in production would flood the market with refined products.
“It’s like someone who used to cook only half a pot of rice and now can cook a full pot. Everyone will be well-fed, and that’s exactly what will happen,” the official remarked.
However, whether this will translate into lower fuel prices at loading points remains uncertain. Market forces, government policies, and the refinery’s ability to secure reliable crude supply will ultimately determine the extent of any price reductions.
For now, Dangote Refinery’s rapid expansion signals a shift in Africa’s refining landscape, but the long-term sustainability of its operations hinges on resolving its crude procurement challenges.
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