The Dangote Petroleum Refinery is ramping up operations to hit a target production of 650,000 barrels per day (bpd) by June 2025. Currently producing approximately 500,000 bpd, the $20 billion Lekki-based facility is set to boost crude imports as the Nigerian National Petroleum Company Limited (NNPC) struggles to meet the refinery's requirements.
Despite a naira-for-crude arrangement initiated by President Bola Tinubu in 2024, officials from the refinery have indicated that additional imports are critical. Sources, who requested anonymity, revealed that the NNPC supplies only 350,000 bpd of the 450,000 bpd allocated for domestic refining, leaving a shortfall for the refinery’s full operational capacity.
Officials acknowledged the scale of the refinery's operations as a key factor in the need for imports. “This isn’t a 200,000 bpd refinery; we’re operating at 650,000 bpd. Currently, we’re producing 500,000 bpd and plan to reach full capacity by midyear,” an insider explained.
The refinery’s high-capacity operations also make it a critical player on the global stage. A consultant to the refinery noted, “This is a refinery for the ‘big boys.’ Few refineries in the world operate at this scale, and even OPEC recognizes its impact on Europe’s PMS market.”
The refinery produces Euro 5-standard fuel, which boasts superior performance and environmental benefits.
As domestic refining capacity grows, the demand for crude oil continues to outstrip NNPC’s allocations. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows that the Dangote refinery, alongside other operational facilities such as Port Harcourt and Warri refineries, collectively require 770,500 bpd to meet production demands.
President Tinubu’s naira-for-crude initiative, which began as a pilot program with the Dangote refinery, is designed to supply crude oil to local refineries in exchange for naira payments. However, with the recent reactivation of Port Harcourt and Warri refineries, pressure on the program has increased. The Federal Government plans to reassess the initiative in April 2025 to evaluate its effectiveness.
To address the supply gaps, the Dangote refinery is constructing eight additional crude tanks, increasing storage capacity by 41.67% to 3.4 billion liters. According to Devakumar Edwin, Vice President of Oil and Gas Business at Dangote Industries, this move is essential. “Reliance on imported crude requires higher stockpiles. Four of the new tanks are nearing completion,” he stated.
Although the NNPC is expected to supply 385,000 bpd under the naira-for-crude initiative, industry observers remain skeptical about meeting this target. Experts suggest that even as Nigeria ramps up crude production, local refineries may still need to depend on imports to bridge supply gaps.