The Economist Intelligence Unit (EIU) has raised concerns that further delays in securing crude oil feedstock for the Dangote Petroleum Refinery could severely impact Nigeria’s economic recovery and exert additional pressure on the naira.
The $20 billion refinery, which began production in January 2024, has encountered setbacks in petrol production due to insufficient crude oil supply, despite successfully exporting other products like fuel oil and jet fuel.
The EIU warns that these delays could exacerbate Nigeria’s budget deficit, which has already been strained by unofficial petrol subsidies, and potentially force the Central Bank of Nigeria (CBN) to implement stricter currency management measures.
The challenges stem from low crude production caused by oil theft and underinvestment, as well as difficulties in securing affordable crude from both the Nigerian National Petroleum Corporation (NNPC) and International Oil Companies (IOCs).
The situation threatens to undermine the refinery’s potential to reduce Nigeria’s dependency on fuel imports and stabilize the naira.