PETAN emerges as critical backbone of Nigeria’s Oil, Gas Industry — Faluyi
Dangote Refinery’s crude oil supply doubles, marking significant boost in operations
…Rising import costs are exerting pressure on profit margins
The Dangote Refinery, Africa’s largest, doubled its intake of Nigerian crude oil in March, receiving 10 cargoes compared to just five in February. This increase is aimed at bolstering Nigeria’s fuel supply in light of the global crude and refined product shortages triggered by the ongoing war in the Middle East.
The refinery, which commenced operations in 2024, initially began producing diesel and naphtha in January that year and later expanded to gasoline production by September. It has since started exporting fuel beyond West Africa, broadening its reach across international markets.
David Bird, CEO of Dangote Refinery, disclosed in an interview with Arise TV last month that the facility currently receives only five local crude cargoes, despite a prior agreement to obtain 13-15 cargoes. He highlighted that escalating costs—ranging from crude acquisition to freight and insurance—have posed challenges, though efforts are underway to stabilize operations within commercially viable parameters.
During a press briefing on Monday, Aliko Dangote, Africa’s wealthiest individual and owner of the refinery, confirmed the delivery of 10 Nigerian crude cargoes in March, marking a notable rise from previous months.
He elaborated that six of these cargoes were acquired using naira, with the remaining four purchased in dollars. With a daily processing capacity of 650,000 barrels of crude oil, the Dangote Refinery requires a minimum of 19 cargoes per month to operate at full capacity.
In addition to local supplies, the refinery has been procuring crude from the U.S. and other African nations to meet its operational needs. However, rising crude oil costs globally have placed additional pressure on operations, as the refinery also depends on imported crude.
Worsening the situation is Nigeria’s upstream sector’s inability to fulfill its crude supply obligations to the refinery under the Petroleum Industry Act (PIA). Management reports issued on March 5 acknowledged that the refinery has had to rely heavily on international traders, who impose additional premiums, further heightening costs amidst soaring global oil prices following tensions in the Middle East.
