Dangote Refinery Disputes ‘Seven Cargo’ Claim, Seeks Higher Crude Supply

By Frontline Reporters

Officials of the Dangote Petroleum Refinery have dismissed reports that seven crude oil cargoes were allocated to the facility for May by the Nigerian National Petroleum Company Limited (NNPC), describing the claim as unconfirmed.

Senior sources at the refinery told Frontline Reporters that while discussions with the national oil company are ongoing, there has been no official communication indicating an increase in allocation from five to seven cargoes.

Recent reports, citing trader sources, had suggested that the NNPC boosted supply to the refinery with seven cargoes for May loading—an apparent increase from previous months.

However, refinery insiders, who spoke on condition of anonymity, said the expected allocation for May is closer to six cargoes, not seven.

“Our May allocation is about 6.15 million barrels. The report of seven cargoes is not clear yet,” a source disclosed.

Supply Gap Persists

Despite the marginal increase, the refinery continues to face a significant supply shortfall. The 650,000-barrel-per-day facility requires nearly 20 million barrels of crude monthly—equivalent to about 19 cargoes—but has struggled to secure even a third of that volume.

Available data from refinery officials show fluctuating monthly supply levels: 4.55 million barrels in October, 6.45 million in November, 4.30 million in December, 5.65 million in January, and 4.66 million in February, with March figures hovering around six million barrels.

The May projection of 6.15 million barrels still falls far below operational requirements.

Pressure on Local Supply

The refinery has repeatedly raised concerns over inadequate domestic crude supply, noting that it receives only about five cargoes monthly from the NNPC—well below the estimated 13 cargoes needed to meet local fuel demand.

In a previous statement, the company explained that even these allocations are priced at international market rates, often with added premiums.

It further accused upstream producers of failing to meet supply obligations under the Petroleum Industry Act, forcing the refinery to rely heavily on imported crude from international traders at higher costs.

Impact on Fuel Prices

The persistent supply challenges have contributed to rising fuel prices, with petrol now selling above ₦1,200 per litre in some areas. The refinery has attributed recent price hikes to elevated crude costs and global supply disruptions.

Ongoing tensions in the Middle East, particularly around the Strait of Hormuz, have further tightened global oil supply and pushed prices upward.

NNPC Responds

Sources within the NNPC said efforts are underway to improve crude supply to the refinery, including sourcing third-party crude through its global trading network.

“NNPC remains fully committed to supporting domestic refining, including the Dangote Petroleum Refinery. We are leveraging our global network to secure crude at competitive rates,” a senior official said.

The official added that supply constraints are temporary and that the company is working within existing agreements to stabilise deliveries.

Call for Policy Intervention

Amid rising costs and supply uncertainty, economists have urged the Federal Government to consider stabilisation measures.

Economic analyst Bismarck Rewane suggested a fixed-price crude supply arrangement for the refinery as a way to control fuel prices and prevent inflationary pressure.

“One option is for the government to sell crude to the refinery at a fixed price, with a corresponding commitment to keep refined product prices stable,” he said.

Strategic Importance

The Dangote refinery remains a critical asset in Nigeria’s energy landscape, with many countries increasingly relying on it for refined products such as aviation fuel and diesel.

However, without a steady and adequate crude supply, stakeholders warn that its full capacity—and its potential to stabilise domestic fuel prices—may remain unrealised.