The $20 billion Dangote Petroleum Refinery in Lekki, Lagos, Nigeria is aiming to reach its full production capacity of 650,000 barrels per day (bpd) by June 2025. Currently producing at 500,000bpd, the refinery is facing challenges in sourcing sufficient crude oil domestically and has begun expanding its reliance on imports to meet production demands.
Officials revealed that the Nigerian National Petroleum Company Limited (NNPC), responsible for supplying 450,000bpd for domestic consumption, has been able to provide only about 350,000bpd to the refinery. This shortfall has necessitated the importation of crude oil to sustain operations. To accommodate the increase in imports, the refinery is constructing eight additional storage tanks to boost its crude storage capacity by 41.67%, increasing total capacity to 3.4 billion liters.
Despite the Nigeria’s Government’s naira-for-crude initiative, which allows refineries to purchase crude oil in local currency, the rising demand for feedstock has outpaced the supply capabilities of NNPC. The initiative, introduced by President Bola Tinubu, aimed to strengthen local refining by fixing an exchange rate for crude transactions in naira. However, with more refineries, including Port Harcourt and Warri, resuming operations, the current allocation is insufficient to meet the collective demand of all functional refineries.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) estimates that eight operational refineries, including Dangote, will require 770,500bpd in 2025, far exceeding the allocation available for local consumption. The Dangote Refinery alone is forecasted to need 550,000bpd, amounting to 99.55 million barrels in the first six months of 2025.
The refinery, producing Euro 5-standard petrol with reduced environmental impact, is considered a game-changer for Nigeria’s energy sector and a significant player in the global refining industry. Officials have highlighted its capacity as one of the largest refineries in the world, attracting international attention and influencing markets beyond Africa.
As the Nigeria’s Government plans to review the naira-for-crude policy in April 2025, the Dangote Refinery continues to scale its operations, emphasizing the need for global sourcing of crude oil to meet its ambitious production targets. Industry experts suggest that as Nigeria’s refining capacity grows, more robust policies and solutions will be required to support the increasing demand for feedstock and sustain the country’s journey toward energy independence.
Source: Swifteradio.com
