• Refinery has received about 800 vessels and expects around 600 annually at full capacity

• Strategy aims to shift up to 75% of local fuel distribution to coastal shipping

• Move aligns with Nigeria’s push to strengthen domestic cabotage

Dangote Refinery is advancing the restructuring of its logistics model. Since operations began at the industrial complex in Lekki, Nigeria, the facility has received about 800 vessels and expects to handle nearly 600 ships per year once it reaches full capacity, according to remarks attributed by local media to its managing director, David Bird.

Beyond the volume, the figures point to a supply and distribution system increasingly centered on maritime transport, departing from traditional models that rely heavily on pipelines or large-scale trucking.

The strategy echoes statements made in 2024 by Devakumar Edwin, vice president of the group’s oil and gas division. Shortly after the refinery officially began operations, he said the company aimed to move up to 75% of its domestic petroleum product distribution by sea, using ports such as Warri, Port Harcourt and Calabar.

For the group, the vertically integrated approach serves three objectives: controlling logistics costs, securing supply flows and managing market outlets. Bird also indicated that the company may consider acquiring vessels once sufficient cash flow is generated, further strengthening control over its transport chain.

Easing Pressure on Roads

Before accelerating maritime freight initiatives, the group had warned that the refinery — with a capacity of 650,000 barrels per day — could generate the equivalent of more than 2,900 tanker trucks daily if distribution relied solely on road transport.

In a country already grappling with heavy traffic due to high population density, fuel distribution by tanker trucks is frequently cited as a contributor to congestion and accelerated road deterioration.

The shift toward coastal shipping thus appears to address a structural logistics constraint. In line with that strategy, Dangote Group is also developing a deep-sea port in the Olokola Free Trade Zone, about 100 kilometers from Lagos. The planned complex is expected not only to support refinery-related flows but also to streamline supply and export operations for the group’s urea plant.

Aligned With Federal Policy

The maritime push comes as Nigeria’s federal government seeks to boost domestic cabotage through the Cabotage Vessel Financing Fund (CVFF). The mechanism provides financial support of up to $25 million per local shipping company, aiming to foster national shipowners and reduce reliance on foreign fleets.

Yet the strategy faces constraints. The capacity of local operators to mobilize suitable vessels, particularly tankers that meet international standards, remains limited. Despite the CVFF framework, financing remains subject to strict banking requirements and commercial viability assessments.

Sustained investment in crew training, ship maintenance and secondary infrastructure upgrades will also be required to ensure that anticipated logistics gains are not offset by new operational bottlenecks.

Henoc Dossa