• Dangote refinery will use only Nigerian crude by end-2025 as export contracts expire
• In June, 53% of crude was locally sourced; past reliance on imports was due to supply issues
• Shift aims to cut fuel imports and stabilize Nigeria’s refined product exports

Aliko Dangote's oil refinery will exclusively use Nigerian crude by the end of 2025. Devakumar Edwin, Vice President of Dangote Industries, stated this in an interview with Bloomberg. He explained that several long-term export contracts, which currently bind local producers to foreign clients, are set to expire. This will allow those crude volumes to be gradually redirected to the domestic market.

In June, 53% of the crude processed at the facility already came from Nigerian producers. The refinery, with a nominal capacity of 650,000 barrels per day, is currently processing around 550,000 barrels. Since it began operations in 2024, the refinery has largely depended on imported crude from the United States, Brazil, Ghana, Angola, and Equatorial Guinea to maintain operations.

This heavy reliance on foreign crude was a necessity, not a strategic choice. In recent years, Nigeria’s upstream oil sector has faced major disruptions. The gradual withdrawal of international oil companies from onshore and shallow-water zones created opportunities for local operators. However, many of these local companies typically lack the financial and technical resources of their predecessors and were also bound by forward contracts. Additionally, widespread crude theft, pipeline sabotage, and persistent insecurity in the Niger Delta have constrained deliveries to the domestic market.

The Fulfillment of a Billionaire’s Vision

The launch of the Dangote Group refinery in May 2023 sparked high hopes. Primarily, it was expected to transform Nigeria’s oil economy by reducing its reliance on imported fuel and adding value to its crude domestically. Until recently, a significant portion of Nigerian crude was shipped to Europe for refining, only to return as expensive finished products. Aliko Dangote’s project aims to overturn this model, which has been widely criticized for its inefficiencies and foreign exchange losses.

The growth of local refining capacity has already had a significant impact, making Nigeria a net exporter of refined petroleum products once again. However, that shift remains fragile. To ensure its sustainability, a steady and reliable supply of local crude must be secured. "As more local producers fulfil their export obligations and focus inward, we believe crude availability will improve," Edwin said.

In July and August, Dangote is expected to receive five crude shipments, each about one million barrels, delivered by the state-owned Nigerian National Petroleum Company (NNPC).

Olivier de Souza