The Dangote Petroleum Refinery, located in Lekki, Lagos, is ramping up its operations to achieve a production target of 650,000 barrels per day (bpd) by June 2025. Currently producing 500,000bpd, the $20 billion facility is poised to solidify its position as one of the world’s largest refineries. However, insufficient crude oil supply from the Nigerian National Petroleum Company Limited (NNPC) is pushing the refinery to consider importing crude oil to meet its production goals.
While the refinery benefits from the naira-for-crude arrangement initiated by President Bola Tinubu in 2024, officials report that the NNPC is struggling to meet the required supply of 350,000bpd for the facility. Given the refinery’s growing demands and Nigeria’s total refining capacity now at 974,500bpd, the Dangote Refinery is forced to explore international crude oil markets for feedstock.
The Vice President of Oil and Gas Business at Dangote Industries, Devakumar Edwin, confirmed that eight additional tanks are being constructed to increase crude storage capacity by 41.67%, bringing total storage to 3.4 billion litres. “Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher,” Edwin stated.
Impact of Refinery Operations
The Dangote Refinery’s capacity to produce Euro 5 standard fuel has been lauded for its quality and efficiency, with officials describing it as a “game-changer” for the Nigerian petroleum industry. According to refinery consultants, the high production standards and scale have already impacted Europe’s PMS market, with OPEC reports highlighting the refinery’s significance.
Naira-for-Crude Initiative
The naira-for-crude deal remains a cornerstone of Nigeria’s refining strategy. Under this policy, the Federal Executive Council approved 450,000 barrels for domestic refineries to be sold in naira, with Dangote Refinery serving as the pilot project. The arrangement has since expanded to include other refineries like Port Harcourt, Warri, and Kaduna as they come back online.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reveals that eight functional refineries in Nigeria will require 770,500bpd, underscoring the challenges of meeting domestic fuel production needs with local crude supply alone.
The Dangote Refinery’s ambitious goal of reaching full capacity by mid-2025 marks a significant milestone for Nigeria’s refining landscape. However, balancing local crude availability with imported supplies will be critical for sustained operations. As the Federal Government reviews the naira-for-crude program in April 2025, the success of this policy and the refinery’s production targets will shape the future of Nigeria’s energy sector.
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