NNPC Doubles Dangote Crude Supply to 10 Cargoes

Operators in Nigeria’s downstream oil sector have projected potential price relief as the Dangote Petroleum Refinery confirmed that crude oil deliveries from the Nigerian National Petroleum Company Limited doubled in March, boosting prospects for improved fuel availability.

The operators, however, noted that the price relief would be guaranteed if the government reduced the price of crude supplied to the Dangote refinery, and they commended the increase in oil volumes supplied to the $20bn Lekki-based plant by NNPC last month.

Nigeria’s push to stabilise domestic fuel supply received a boost as the Dangote Petroleum Refinery disclosed that crude oil deliveries from NNPC doubled in March, amid global supply disruptions triggered by tensions in the Middle East.

Africa’s richest man and President of the Dangote Group, Aliko Dangote, revealed in a report by Bloomberg on Tuesday that the refinery received 10 cargoes of crude oil from the state-owned oil firm in March, compared to an average of about five cargoes monthly since late 2024.

Dangote said the shipments included six cargoes paid for in naira and four in dollars, under the crude supply arrangement between the refinery and the NNPC.

other African nations in March alone, underscoring its emergence as a key supplier on the continent. “Many African countries now rely on us for their petroleum products, especially with the disruptions in the Middle East,” he said.

Beyond fuels, the refinery is also ramping up production of polypropylene, a key industrial material used in plastic manufacturing and automotive components, which Dangote described as being in short supply globally. “The demand for polypropylene is very high, and it is currently scarce because of what is happening in the Middle East,” he added.

The crude-for-naira deal between the NNPC and the Dangote refinery, signed in October 2024, was designed to enhance local refining, conserve foreign exchange, and stabilise fuel prices in Nigeria. However, implementation has faced challenges, including inconsistent crude supply and competition from international traders.

The refinery, with a capacity of 650,000 barrels per day, is expected to significantly reduce Nigeria’s dependence on imported refined petroleum products, which have historically strained the country’s foreign reserves.

Recent geopolitical tensions in the Middle East have further highlighted the importance of domestic refining, as disruptions in global supply chains continue to affect fuel availability and pricing worldwide.

While increased crude allocation to the Dangote refinery is a step in the right direction, sustained supply and improved cooperation with oil producers will be critical to achieving full operational capacity and long-term energy security.

Commenting, the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said the delivery of 10 crude cargoes in March signals improved supply to local refineries, but warned that Nigerians may not feel the benefit through lower pump prices without government intervention.

Olatide said, “The 10 crude cargoes supply recorded in March is a good development because it indicates more crude supply and, by extension, more fuel availability. But without Federal Government intervention through crude subsidy to the Dangote refinery and other local refineries, Nigerians will continue to experience availability but unaffordability, as petrol and diesel prices are poised to hit N1,500 per litre and N2,000 per litre at the pump.”

He further explained that the pricing structure of crude supplied locally remains tied to international benchmarks, limiting the possibility of immediate price relief for consumers. “The six cargoes paid for in naira are still priced using international benchmarks, so Nigerians should not expect any drop in pump prices. What the Federal Government should do now is introduce crude subsidy,” he said.

Olatide warned of looming pressure in the downstream market, noting that diesel prices had already crossed a critical threshold at the depot level. “As I speak, diesel prices at the depot have just crossed N2,000 per litre, so there is a crisis ahead,” he added.