Dangote Refinery Moves to Import Crude Oil From US as NNPC Denies Plans to Cut Supply
- The Dangote Refinery is set to receive about 12 million barrels of crude oil from the United States of America
- The crude oil cargo is due to arrive at the Lekki-based refinery in February this year to shore up production
- The refinery plans to reach full refining capacity in June, however, crude oil supply shortage may hinder the move
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Dangote Refinery is about to receive 12 million barrels of crude oil from the United States.
A report said the mega refinery resorted to crude import as local supply hassles by the Nigerian National Petroleum Company Limited (NNP) halted plans by the facility to reach full refining potential.
Source: UGC
Dangote Refinery to increase petrol production
The refinery plans to hit its 650,000 bpd capacity in June this year.
However, low supply from NNPC poses a challenge to the plan to increase daily production.
According to the Africa Report, the expected 12 million barrels have already departed the US and will arrive at the Lekki-based refinery in February.
The report said Dangote is importing more crude as supply from the state oil firm is insufficient for its production.
Legit.ng previously reported that the NNPC may cut crude oil supply to the mega refinery from the current 350,000 barrels per day due to demand from the Port Harcourt and Warri refineries.
Dangote Refinery reportedly produces 500,000bpd
NNPC spokesman, Olufemi Soneye, in response to Legit.ng's query on the issue debunked the alleged plans to cut crude supply to the Dangote Refinery, calling it false.
Soneye said:
"I am not aware of any such plans by NNPC Ltd. to cut crude oil supply to the Dangote Refinery. Hence, this allegation is false."
However, officials of the refinery said that the facility hit 500,000 barrels per day production capacity, targeting to reach full refining potential in June this year.
Punch reports that the national oil company is struggling to supply the agreed 350,000 barrels per day to the Lekki-based refinery from the 450,00o allocated for local consumption.
As the refinery hit the 500,000 barrels per day capacity milestone, officials said there is a need to seek crude supply from outside Nigeria.
This is the second time Africa’s largest refinery would import crude from the US to meet production needs.
In May last year, the refinery imported 11 million West Texas Intermediate (WTI) crude from the US and additional imports from Brazil.
In July, President Bola Tinubu directed the NNPC to sell crude to local refineries in naira.
In October 2024, the naira-for-crude committee began the sale of crude oil to the Dangote Refinery in the local currency, stating that it sells only to petrol-producing refineries.
Experts say more refineries would be considered for the naira-for-crude deal as the Port Harcourt and Warri refineries commence petrol refining.
Petrol refining forecast by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), shows that the Dangote Refinery would need about 550,000 barrels of Nigerian blend daily, 17.05 million barrels per month, and 99.55 million barrels every six months in 2025.
Dangote refinery builds new tanks for crude
The gigantic refinery is already building eight more tanks to store imported crude as it plans to stockpile imported crude as local supplies decline.
It is unclear if the petroleum product prices would be affected when the refinery receives the crude oil.
However, experts say that the import could affect prices in the local market as the facility would want to maximise profit.
"There will be changes in pricing," Osaze Igho, energy analyst, told Legit.ng.
"The Refinery is not state-owned and cannot absorb costs for the consumer. It is profit-oriented. So, yes, there will changes in ex-depot prices," he said.
NEITI explains 23.54 billion litres of fuel imported by marketers
Legit.ng earlier reported that the Nigeria Extractive Industries Transparency Initiative (NEITI) said Nigeria recorded the highest PMS import of 23.54 billion litres in 2022.
NEITI also said the country reported the lowest import volumes of 16.88 million litres in 2017.
The agency commended the Nigerian National Petroleum Company Limited (NNPC) for completing the rehabilitation of the Port Harcourt refinery and restarting the Warri refinery.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
