Dangote Refinery Highlights Challenges in Naira-for-Crude Agreement with NNPCL

Dangote Refinery has expressed concerns over the Naira-for-crude agreement with the Nigerian government, citing insufficient crude oil deliveries to support its operations.

In an interview with Reuters, Devakumar Edwin, Vice President of Dangote Industries Limited, disclosed that crude supplies from the Nigerian National Petroleum Company Limited (NNPCL) have fallen short of the agreed volume.

According to Edwin, the refinery requires 650,000 barrels per day (bpd) to scale up production of refined products. The agreement with NNPCL stipulated a minimum supply of 385,000 bpd, but current deliveries are reportedly much lower. “We need 650,000 barrels per day. NNPCL agreed to give a minimum of 385,000 bpd, but they are not even delivering that,” Edwin explained.

The Naira-for-crude initiative, launched in October 2024, aimed to boost local refining capacity and reduce reliance on imported petroleum products.

In response to the shortfall, Dangote Refinery has resumed importing crude oil from the United States, a move intended to ensure uninterrupted production at the $20 billion facility.

Despite these challenges, the refinery remains committed to its goal of transforming Nigeria’s energy sector and reducing the country’s dependence on imported fuel.

The Naira-for-crude agreement is a significant initiative with the potential to strengthen Nigeria’s energy sector. However, consistent supply remains crucial for its success. As efforts to resolve these challenges continue, the refinery’s operations highlight the importance of reliable partnerships in achieving economic growth.