Fuel Prices May Drop Soon as NNPC Solves Major Challenge Facing Dangote Refinery
- NNPC doubled crude oil supply to Dangote Refinery to 10 cargoes in March
- Operators say improved supply could boost fuel availability across Nigeria
- The refinery still operates below capacity and relies partly on imported crude
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
Operators in Nigeria’s downstream oil sector say there are prospects for fuel price relief following increased crude oil deliveries to the Dangote Petroleum Refinery by the Nigerian National Petroleum Company Limited (NNPC).
However, they noted that any meaningful reduction in pump prices would depend on government intervention, particularly through lower crude pricing for local refiners.
Source: UGC
Crude supply to the refinery doubles
According to a report by Bloomberg, the President of the Dangote Group, Aliko Dangote, disclosed that the refinery received 10 cargoes of crude oil from NNPC in March, up from an average of five cargoes monthly since late 2024.
The shipments included six cargoes paid for in naira and four in dollars under the existing crude supply arrangement.
Dangote said the increase came as Nigeria moved to stabilise domestic fuel supply following disruptions in global oil markets linked to tensions in the Middle East.
Push to strengthen local refining
The development signals what industry stakeholders describe as a strategic effort by the Federal Government to support domestic refining and reduce reliance on imported petroleum products.
Reports had earlier indicated that NNPC allocated additional cargoes for future delivery, although refinery officials said they could not confirm specific figures for May.
Despite the improvement, Dangote noted that the refinery still operates below optimal capacity, requiring about 19 cargoes of crude monthly.
“The supply has improved, but it is not yet at the level we need. We still have to import crude from the United States and other African countries,” he said.
The refinery continues to rely partly on imported crude to meet demand, raising concerns about production costs in the downstream sector.
Dangote explained that limited access to locally produced crude—especially from international oil companies—forces the refinery to purchase Nigerian crude at higher prices through intermediaries.
Exports rise as regional demand grows
The refinery’s role in regional energy supply is also expanding. Dangote disclosed that about 17 cargoes of petroleum products were exported to African countries in March.
He added that several countries now rely on the refinery’s output, particularly amid disruptions in global supply chains.
In addition to fuel, the facility is increasing production of polypropylene, a key industrial material currently in short supply globally.
Experts: Price relief depends on government action
Industry operators say the increased crude allocation could improve fuel availability, but warned that price relief is not guaranteed.
Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said government intervention would be required to reduce costs.
“The 10 crude cargoes supply recorded in March is a good development because it indicates more fuel availability. But without Federal Government intervention, Nigerians may continue to face high prices,” he said.
Olatide explained that even crude supplied in naira is still priced using international benchmarks, limiting the chances of immediate price reductions.
He warned that diesel prices have already crossed N2,000 per litre at the depot level, signalling potential pressure on the downstream market.
Source: UGC
Dangote Refinery threatens full export
Legit.ng earlier reported that the Dangote Refinery has threatened to fully supply the international market and deny Nigerians fuel if the Nigerian authorities continue to grant import licences to importers.
Sources within the mega refinery disclosed that management is considering exporting all petroleum products in response to the continued issuance of petrol import licences, despite official claims to the contrary.
Experts argued that reduced local supply may lead to fuel shortages, long queues at filling stations, and renewed upward pressure on pump prices. Such an outcome would reverse recent stability in the downstream sector.
Source: Legit.ng
