Dangote Petroleum Refinery and several modular refineries in Nigeria may spend approximately $8.56 billion over the next six months to import about 122.4 million barrels of crude oil to sustain full operational capacity. This translates to a monthly expenditure of around $1.43 billion on crude imports.
The development comes amid growing uncertainty over the sustainability of the naira-for-crude policy between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Refinery. Concerns have also emerged over the Federal Government’s Domestic Crude Supply Obligation, raising questions about the availability of locally sourced crude for domestic refiners.
A scheduled meeting between the Technical Sub-Committee on the Naira-for-Crude Policy, Dangote Refinery, and other government officials failed to hold as planned on Monday.
Sources within the committee revealed that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) requested more time to conclude its assignment. The meeting has been rescheduled and may take place before the Sallah holiday.
The Dangote Refinery, with a capacity of 650,000 barrels per day (bpd), has consistently imported crude and will likely continue to do so due to the uncertainty surrounding the naira-for-crude deal. The Edo Refinery, with a 30,000 bpd capacity, is also exploring offshore supply options.
Insiders disclosed that the Dangote and Edo refineries require about 680,000 bpd, translating to approximately 20.4 million barrels monthly or 122.4 million barrels over six months. At an average crude price of $70 per barrel, this would amount to an estimated $8.56 billion in crude import costs.
Eche Idoko, National Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, confirmed that securing crude from alternative suppliers is now a priority for local refiners. Idoko said that the government’s failure to ensure domestic supply has left local refiners stranded, forcing the Edo Refinery to seek an offtake agreement with a US-based crude supplier.
“Edo Refinery, which is working to expand its capacity to 30,000 barrels per day, is in talks with US crude suppliers. Aside from Walter Smith and Aradel, which rely on production from their fields, other modular refineries have not refined a litre in the past six to eight months,” Idoko stated.
Idoko criticised the government’s failure to allocate sufficient feedstock to domestic refineries, warning that the situation could have political consequences.
“Dangote or any local refinery resorting to offshore crude imports due to a lack of local supply undermines the government’s efforts to stabilise the sector. Whoever is frustrating crude supply to local refineries is arming the opposition ahead of the 2027 elections,” he added.
The abrupt cancellation of the first phase of the naira-for-crude arrangement last week further complicated the situation. The national oil company’s commitment to settling foreign debts with crude allocations has constrained domestic supply, leading to the current impasse.
Analysts point to the Nigeria Extractive Industries Transparency Initiative (NEITI) and NNPCL’s 2023 financial statements, which revealed that NNPCL had pledged 8.17 million barrels of crude monthly to settle foreign loan deals. Additionally, a $9.5 billion forward oil sales agreement further limits available crude for domestic supply.
In response to the failed talks, Dangote Petroleum Refinery recently suspended the sale of petroleum products in naira, citing a mismatch between its sales proceeds and crude procurement obligations, which are denominated in US dollars.
“Sales of petroleum products in naira have exceeded the value of naira-denominated crude received. As a result, we must temporarily align our sales currency with our crude procurement currency,” the company stated.
The decision has intensified pressure on domestic refiners, forcing them to seek offshore crude imports to maintain operations. Dangote Refinery imported 654,766 metric tonnes of crude within three days of the announcement.
The fallout from the naira-for-crude deadlock has triggered higher petrol prices across the country. On Monday, petrol prices at private depots in Lagos increased, pushing retail prices in the Federal Capital Territory (FCT) to as high as ₦940 per litre.
Conoil along Airport Road raised its price to ₦940 per litre, while AYM Shafa and Matrix adjusted their prices to ₦920. Salbas increased its price to ₦930 per litre. Meanwhile, NNPCL and MRS filling stations maintained lower prices at ₦880 per litre, leading to long queues.
Depot price adjustments have also been recorded, with Rainoil raising its price from ₦860 to ₦870 per litre and WOSBAB increasing to ₦870 per litre.
Stakeholders have warned that unless the government resolves the crude supply bottleneck and stabilises the naira-for-crude policy, domestic refiners will remain dependent on costly imports — a situation that could escalate inflation and fuel scarcity in the coming months.
